New Payday Loan Bill Introduced: SB 975

Payday lending proponents have unveiled their proposal in the Senate to bring legalized predatory payday loans to Pennsylvania. It is Senate Bill 975, and bears the misleading title of  “Micro Loan Reform”. This proposal intends to override the Commonwealth’s strong consumer protections and to legalize harmful payday loan products in Pennsylvania. The bill was passed by the Senate Banking and Insurance Committee on June 4th and now heads to the Appropriations Committee. Download this one-page analysis here.

Last year the faith community was instrumental in keeping a bill that legalized payday lending off the Senate floor. Our clear Scriptural prohibitions against usury that exploits the poor and vulnerable provide a strong foundation from which to advocate.
  • SB 975 is no different than HB 2191 from last year in that, at its core, it legalizes the same debt trap payday product at a triple digit interest rate.
  • Adding up all the application and processing fees and interest, it would legalize a 288% APR on a typical, two-week $300 payday loan.
  • It is grossly inconsistent with protections in place for the military (which provides a 36% APR cap), putting the state’s nearly 1 million veterans and all Pennsylvania families at risk.
  • It legalizes 8 consecutive loans at these high rates, allowing the repeat, rapid borrowing that makes payday lending so profitable for lends but makes it difficult for borrowers to repay the loan without re-borrowing. In states with laws similar to SB 975, the typical payday borrower is stuck in 8 loans a year. This is the cycle of debt which is associated longer-term financial harms such as      bankruptcy and delinquency on other bills.

As demonstrated last session, there is broad opposition to legalizing high-cost payday loans. Pennsylvania already has among the strongest laws in the country to protect against payday loan abuses, as recognized by the U.S. Department of Defense and the Pew Charitable Trusts. Our law effectively protects against illegal predatory loans, even if made online, since they are void and unenforceable.

ACT NOW to urge your Senator to oppose this bill and to oppose any efforts to legalize predatory lending.

PRAY that we may enact and enforce laws that protect our most vulnerable citizens from usury and exploitation.

PLEASE SHARE this alert with friends and congregation members who may be likely to act on it.

LEARN MORE at  Stop Predatory Loans PA.


Please email and call your legislators TODAY. Tell them we don’t need to bring 1,000 payday loans storefronts to Pennsylvania peddling high-cost loans, and urge them to oppose the payday lenders proposal to weaken our state’s strong laws.

Add Your Own Comment

Mail (will not be published) (required)