Cash advance direct lender end?
Cash advance direct lender rates up
Kentucky cash advance direct lender databases are again showing disturbing trends. The database indicates that more and more borrowers in the state for payday loans are paying higher interest rate. Its time to cap the interest rate on payday loans says the Kentucky Herald. Seventeen other states have done it and Congress has done it for military families.
Yet Kentucky has continues to allow these lenders to charge borrowers an annual interest rate of 400 percent. These loans are simply trapping borrowers in a cycle of debt from which they cannot escape at the same time draining local economies of millions of dollars in revenue. In 2010 that amounted to $80 million.
New payday loan database system
State Rep. Bill Owens from Louisville filed a bill in 2010 seeking to cap payday lending at 36%. The bill didn’t make it. Instead the state launched a new payday lending database system that didn’t protect the consumers of the state.
Owens has filed his bi once again in the current session of the Kentucky house and drawn at least 25 cosponsors. What the new Kentucky database does right to collect hard information on what payday lending costs the borrowers and the communities of the state. Who is taking out the loans and who is profiting from lending?
The database confirmed what other states already learned. The average cash advance direct lender annually provides eight loans per customer. The loans are not isolated emergency loans but become long term loans that trap a consumer in an endless cycle of payday lending debt.
An increasing number of payday loans-13.3 of all transactions performed in 2010-are being made to borrowers who are 60 years of age or older.
Seniors provide hardly any risk to the cash advance direct lender because their retirement or Social Security income is a steady stream of income. This steady income essentially guarantees the payment of the loan and renewal of the payday cash advance.
In 2010, 72 percent of the voters in the state of Montana approved a 36% cap on payday loan lending. Arkansas saw their payday lenders capped at 17% and Ohio capped their lenders at 28%.
North Carolina performed a study of consumers after the elimination of payday lending in the state and discovered that there was no negative affect on low income consumers. Many of the low income consumers reported that they were pleased that the high interest rates and fees charged by these types of payday loan broker
had been removed from their communities.
Cash advance direct lender to become more responsible
Kentucky requires responsible cash advance direct lenders and not out of state corporations that are draining millions of dollars from our economy with abusive 400% interest rates.