The group mobilizes against payday loan companies
TOPEKA, Kan. (KSNT) – Payday loans allow people to get money fast. But on Tuesday, members of the group, Kansans for Payday Loan Reform, rallied against the lenders, saying they were charging rates that were too high.
Annie Ricker is a pastor in a church in Berryton. She said that a few years ago she and her husband lived paycheck to paycheck. Then her husband lost his job, they had medical bills and had car problems to deal with.
“We felt like we didn’t have a lot of other options so we took out a loan to cover what we needed and then because of the high interest rate it snowballed,” Ricker said.
Supporters said it was all too common an event and vulnerable people were being targeted.
Marilyn Stanley is Executive Director of Housing and Credit Counseling Inc. She said many people her organization works with struggle with payday loans or car title loans.
“Often, because they are afraid of repaying that loan, they may miss other payments like utilities or food to feed their families,” Stanley said. “It might even miss their rent or their mortgage payment, become past due on those, so it’s kind of a snowball effect.”
Currently, the state allows lenders to charge interest rates of up to 391%.
Supporters said lawmakers need to cap that number at a much lower rate so that paying for an emergency doesn’t turn into a long-term economic struggle.
“We don’t want to excuse them for their financial obligation,” Ricker said. “We want to allow them to access this type of loan but to do it in a way that does not paralyze them further.”
The group also said that lawmakers reforming laws that would give people more time to repay their loans would help those who need them most.
Supporters said new restrictions would keep more money in Kansas, as many companies are state-owned.