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Churches Launch anti-Payday Loan Petitions
March 11th, 2012
A group of religious leaders meet to learn more about payday loans.
Responding to an invitation of Michael Overton, senior pastor of First Baptist, church leaders learned how the problem of payday loans is affecting people in their neighborhoods and what they can do about it, according to a news release. Present at the Feb. 27 event were representatives from Baptist, Catholic, Church of Christ, Episcopalian, Jewish, Lutheran, Methodist and Mormon congregations.
Interest
Those in attendance learned that, according to the Missouri Department of Finance’s Jan. 4, 2011 report to the General Assembly, the average payday loan was $307. The average rate of interest was 445 percent APR. That means a $300 loan would have an interest charge of nearly $50 for only 14 days.
Missouri
According to the report, in January 2011, 2.43 million loans were made in Missouri, with an average loan amount of $307.56 and an average annual rate of interest at 444.61 percent. According to current Missouri law, a loan and subsequent renewals may not earn more than 75 percent of the original principal in interest and fees. That means a $100 loan can earn up to $75 in interest and fees. In comparison, neighboring states all have caps of $15 per $100 loaned. Missouri allows up to six renewals. Renewals are not allowed in any neighboring states.
Petitions
At the meeting, petitions were distributed. The petitions call for legislation to bring Missouri’s laws in line with neighboring states by placing a cap of 36 percent on this type of loan. The Missouri legislature has failed to pass this legislation in spite of bills presented since 2008. Anyone who wishes to sign a petition, or secure petition forms and collect additional signatures, can do so by contacting First Baptist Church at
417-866-7202.
Missouri’s Economists Call For a Payday Loan Language Change
August 21st, 2011
1,620 payday loan stores will close once the bill is implemented.
The latest news reveals that a case was filed in the Cole County Circuit Court on August 19, 2011 to restrict the levels of payday loans interest rates.
Summary
In this case, John Prentzler, the director of auto operations, a dealer of payday loans for cars, was the applicant. The case was filed by Kansas City attorney Todd Graves with assistance from Jefferson City attorney Chuck Hatfield. A formal request was made by the Missourians for Responsible Lending, for Rev. Jim Bryan to Secretary of State Robin Carnahan. Rev. Jim Bryan wants to put cap on the APR of payday loans. This group requires the voters to decide by November 2012 if the quick cash loans and car title loan will come down to 36 percent.
Misleading language
However, according to the latest reports, the ballot language is misleading partially in the sense that if the bill is implemented, the interest rate will reduce for the public but it is going to cost the state between $2.5 million and $3.5 million, a direct economic blow for the nation. Moreover The Missouri Division of Finance has concluded that 1,620 payday loan stores will close once the bill is implemented. In addition to this, Joseph Haslag, professor of economics at the University of Missouri estimates that if the bill is implemented then, total economy will decrease by $57 million in the first year and $57.5 million in the second year as a result and revenue tax will be lost and unemployment will increase.
Amend the ballot language
In this respect the court case asked the judge to amend the ballot language such that the state’s economy as well as the people’s money is not at risk. But in order to implement this new law, more than 90,000 signatures have to be collected from six states and nine districts by November 2012 election. “Individuals currently collecting signatures are doing so at their own risk,” Graves said in a recent release. He also mentioned that if a judge orders for changes in the ballot language, as expected, the signatures already collected will go in vain. On the other hand Bryan stated that the group has not collected the signatures but it will definitely resolve to reduce the interest rate.
Scandalous Payday Loan Rates Prompt Petitions
August 15th, 2011
Citizens taking matters into their own hands
Missouri’s has developed the reputation of being the nation’s “puppy mill capital” and lawmakers’ continuous refusal to deal with this paved the way for last year’s ballot initiative requiring humane treatment of breeding dogs and their puppies. Only after the measure passed did leaders get serious about rewriting the state’s lax laws, if only to water down the voter-approved regulations.
Next comes the lending industry
In similar manner, the legislature has refused for several years to take on substantive reform of the loose laws that make Missouri’s payday lending industry the most plentiful and permissive in the nation. Frustrated by the legislature’s inaction and an effort this year to pass a sham reform bill, a coalition of faith-based and civic groups has united to attempt to place an initiative petition on the 2012 statewide ballot.
Capping the interest rate
The petition, which has been approved for circulation, would cap the annual percentage rate on a short-term loan at 36 percent, which is the limit that Congress approved for loans to U.S. military families. 17 states have capped the rate at 36 percent. Missouri’s ceiling is 1,950 percent, with the average annual percentage rate on payday loans last year at 444.61 percent.
Signatures
Gathering signatures to place an initiative petition on the statewide ballot is a daunting task. However, reformers in Arizona and Montana pulled it off, and voters in both states approved substantial changes. Missouri’s recent history with payday loan reform attempts is abysmal. In 2009, the House speaker refused to assign legislation prepared by Democrat Mary Still of Columbia to a committee. In 2010, the same House leader, Republican Ron Richard, sent Still’s bill to a committee chaired by a legislator who operated a payday loan business.
Short-term lending
Lenders say a cap of 36 percent annual interest would kill the short-term lending industry in Missouri, leaving citizens with poor credit and banking histories nowhere to go in a financial emergency. But that’s the legislature’s fault for not looking in good faith for a middle ground. There is simply no excuse for Missouri’s lending laws to be vastly more permissive than any other state. “I saw what happened when a bill was brought to the legislature,” said Jim Bryan, a retired United Methodist pastor from Columbia who is leading the reform coalition. “We’re basically concerned about the fairness of these institutions preying on people in financial distress.”
Worth pursuing
Put payday lending reform is a homegrown attempt worth pursuing, and one that the state legislature brought upon itself.
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