There is a lot of coverage in the papers these days about elected officials putting a rate cap on payday loans. I wanted to make sure you heard from someone involved in the industry. I work in a payday loan store. Every day I go to work with pride because I know I am helping people who have no other options to solve their financial difficulties. They cannot get a loan from their bank and they have no friends or family that are able to help them. They do not want to pay the high fees that banks and credit card companies charge for overdrafts, late payments and interest. They understand the terms of the loan and use it responsibly.
We wouldn’t be able to help these people and I wouldn’t have a job if interest rates were capped at 36%. Payday loan companies simply can’t do business under those circumstances. Forcing a rate cap is the same thing as banning the product. In states where there are rate caps, payday loans have been eliminated and people’s financial problems didn’t disappear. In those states there has been a rise in bankruptcy filings, bounced checks, late fees, and disconnected utilities. If politicians put a rate cap on short-term loans, it will cause severe hardships for working people and their communities – making tough times even more painful.