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):
‘They’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 ‘two-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 ‘90 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 ‘two-week product’ claim made by Krueger and the industry is what someone from Richard Nixon’s team might call a ‘non-operational statement.’
In other words, bunk.