Payday Loan Critics Face Proponents

Posted On: September 9, 2010 at 2:27 p.m.

Filed Under: montana payday loan title loan

The payday loan industry has had to put up a fight over the past couple of years to make sure their voice is heard over the legislation to hurt the industry. As lawmakers work to keep interest rates down, payday loan companies argue that the interest rates are what they are because there is no other way to stay in business. The exorbitant rates that lawmakers quote are taken out of context, they say. The latest reports are coming from Montana: “Proponents of an initiative that would cap the interest rate for payday and title loan lenders held a rally in Great Falls on Wednesday. [[ads]]

Supporters of I-164 say it would help keep payday loans under control, but lenders say they’re being unfairly targeted, and not only would passage of the measure put them out of business, but it would leave their customers with nowhere to turn.

MT state legislators Anders Blewett, Jesse O’Hara, and a group of other organizations are hoping a bi-partisan effort will help get voters to pass the initiative; Blewett noted that passage of I-164 would cap interest rates at 36%.

Blewett says over the last decade the legislature has failed to regulate payday and title loan lenders which is why they’re taking it to the voters. Blewett noted that the 36% interest rate they’re proposing is the same rate that credit card companies and other lenders are capped at.

On the other side, payday and title loan lenders say the initiative would put them out of business and eliminate choices for consumers” (http://www.kxlh.com/news/payday-loan-initiative-draws-praise-criticism-in-great-falls/). Any argument, if legitimate, should be taken into context. Are the lenders right? Are payday loans viable, important options for consumers?