July 26, 2012
Payday lobbyists didn’t take a summer vacation
Although the General Assembly has been in recess since passing the budget, lobbyists are working hard in the districts to make sure their priorities are addressed when legislators come back in September/October for a short (just 8 session days in the Senate) fall session. Among the hardest working lobbyists this summer are those championing HB 2191, a bill that would allow payday lenders into Pennsylvania by removing our current 24% interest rate cap and instead allow lenders to charge more than 300% APR! Since they are hard at work, we must be too. Here are two important facts about payday lending that advocates should know – and should communicate to your State Senator:
1) Proponents of the bill say it is necessary because Pennsylvanians needing these loans are running to the internet where they are exposed to interest rates even higher than this bill would allow. However, a new report from the Pew Charitable Trusts confirms what many consumer advocates already knew. States with permissive laws (like HB 2191) have MORE citizens who seek internet loans, not less. In fact, internet lenders use payday lending storefronts to gain access to new customers.
2) This product does not meet a financial need. The only beneficiaries are the payday lending industry – which is why they are the only ones supporting the bill. In the recent report, 81% of borrowers said if they had not had access to the loans they would reduce spending. Other options include help from friends/family or negotiating with creditors.
Where does your State Senator stand on HB 2191? We hope you’ll share this information and ask for his/her firm opposition to any bill that would allow such usurious interest rates. You can learn more at www.stoppaydayloanspa.com The new report from Pew can be found by clicking here