An official from Advance America responds to a recent letter calling on the Rhode Island General Assembly to impose limits on the interest charged for so-called payday loans.
Tuesday, April 3, 2012
Dear Editor: A recent letter to the editor (“Support Curbs on Payday Lending Interest Rates,” Mar. 23, 2012) presents a misguided argument for regulations that would do more harm to consumers than good. When facing a financial shortfall, Rhode Islanders make borrowing decisions based on their personal and economic interests. For many, a payday advance, with its one-time fee of $10 per $100 borrowed, serves as an affordable tool for overcoming such challenges, especially when compared with more expensive options such as overdraft fees, unregulated Internet loans or missing a bill payment. While any form of credit can be abused or misused, our experience shows that most customers use payday advances responsibly: Over 95 percent of Advance …
A consortium of groups and individuals is calling on the Rhode Island General Assembly to support limits on the interest rate allowed on so-called payday loans.
To the editor: The [Rhode Island] House Committee on Corporations is considering legislation to reduce the legal rate of interest on payday loans from the unconscionable APR of 260% to 36%. The bill (H-7257) has been co-sponsored by 50 of 75 representatives. The senate bill (S-2307) is co-sponsored by 26 of 38 senators. Because of the likelihood of passage, lobbyists for payday lenders are trying to make sure that the bills never get a vote in either chamber. Payday loans are marketed as short-term solutions to a cash shortage. In reality, borrowers get trapped in a cycle of borrowing at unconscionable interest rates. The family that couldn’t afford to pay expenses before obtaining a payday loan now has to shoulder the burden of triple-…