Payday Loan Battle: Who Will Win?

Posted On: February 27, 2010 at 2:17 p.m.

Filed Under: consumer kentucky payday loan

Back and forth, back and forth. As I continue to report the findings about the current payday loan debate, I keep asking, who will win? Unltimately, I hope it is the consumer. Unfortunately, it appears that the consumer has little say in the whole battle. This is a debate between wealthy lawmakers and wealthy lobbyists. Here’s part of the current debate in Kentucky: “A Louisville lawmaker wants tighter restrictions on payday lenders in Kentucky, but the industry is fighting back. [[ads]] Rep. Darryl Owens says payday lenders prey on the poor, and leave many customers struggling with long-term debt. Owens and 19 co-sponsors are offering legislation capping interest on payday loans at 36-percent annually. “I feel, very strongly, that we can get this done,” says Owens, “It is not going to be easy, but of everybody puts their shoulder to the wheel, we can gets this moving.” But the industry says legislation approved last year hasn’t been given time to work. It creates a statewide database to track payday loans, to ensure that no person takes out more than two loans with a total limit of 500-dollars. The industry predicts the database will eliminate up to 30-percent of payday loans in Kentucky” (http://www.wfpl.org/2010/02/08/owens-offers-bill-to-cap-interest-on-pay-day-loans/). One side says that the industry preys on the poor, the other says that all kinds of consumers come in, mostly not considered poor. Lobbyists say that an important service is being provided to those who live paycheck to paycheck. Who is right?