Payday Lender Mouthpiece Admits: Industry Discriminates Against Military Families

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On this past weekend’€™s Wisconsin Public Television Here and Now show, viewers were treated to a discussion about a proposed 36 percent interest cap on payday loan sharks between the bill’€™s author, Rep. Gordon Hintz (D-Oshkosh) and payday industry lobbyist Erin Krueger.

Responding to Rep. Hintz’€™s observation that Wisconsin is the only state without a rate cap and how the bill mirrors similar protections extended federally to military families and personnel, Krueger snapped back with this gem (at 7 minute mark):

‘€œThey’€™re not giving advances to military under that 36 percent interest rate cap,’€ she said.Simple as that. If payday lenders can’€™t gouge military families at annual rates as high as 525 percent (Wisconsin’€™s average), then Krueger says the industry won’€™t lend to them.

I have six payday lenders within six tenths of a mile of where I live on the east side of Madison. Nice to see a completely unregulated industry that preys on those in financial crisis can be so profitable.

Payday lenders succeed by grinding users into a soulless cycle of payment and poverty. They must be stopped from continuing to prey on our society’€™s most vulnerable.

If the lenders want no regulation, prove that your business doesn’€™t destroy lives. Show just how many people pay their loans off in Wisconsin on time — without having to make another load within a week of paying off the previous debt. If you’€™re going to claim that your business is a ‘€œtwo-week product,’€ let’€™s see real figures showing the vast majority of people pay it off in two weeks without immediately returning.

Oh wait, the Center for Responsible Lender reports ‘€œ90 percent of payday lenders’€™ revenue comes from loans that are rolled over or reissued shortly after they are paid off. The typical borrower pays back $793 for every $325 borrowed.’€

Would seem like the ‘€œtwo-week product’€ claim made by Krueger and the industry is what someone from Richard Nixon’€™s team might call a ‘€œnon-operational statement.’€

In other words, bunk.

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Scot Ross served as Executive Director of One Wisconsin Now & the Institute from 2007 to 2019.