Posts tagged: Payday loans
Here’s a link to my full story at spokesman.com on Idaho having the highest interest rates in the nation for payday loans, at 582 percent, and how payday loan reform legislation passed by this year’s Legislature won’t change that. Washington’s average percentage rate for payday loans is 192 percent, because of additional restrictions that state places on payday lending businesses. Idaho is one of just seven states with no limits on interest charges or fees.
This year’s legislation was highly controversial, with numerous groups opposing it for not going far enough to reform the business in Idaho, and major payday lenders backing it as a “progressive” move to protect consumers. But many of the lawmakers who voted against the bill thought it went too far. Said Sen. Todd Lakey, R-Nampa, “I don’t think it’s government’s role to protect people from themselves.”
Idaho's payday lenders charge the highest interest rate in the nation - an average 582 percent, according to a study from the Pew Charitable Trusts. The trusts found that Idaho, Nevada and Utah had the nation's highest interest rates for payday loans; the three states are among seven that put no limits on those rates. Click below for a full report from the Salt Lake Tribune via the Associated Press; the Tribune reported that 15 states either ban payday loans or cap interest rates at 36 percent. The news comes after a payday loan reform bill that contains no caps on interest rates passed the Idaho Legislature this year amid much controversy; opponents said the bill, backed by major payday lenders, didn't go far enough to reform the business in Idaho. SB 1314, which passed the House by just one vote, was signed into law by Gov. Butch Otter on March 26.
The new law, which takes effect July 1, limits borrowers taking out payday loans to an amount not to exceed 25 percent of their gross income, with the borrower to provide the proof of that; and requires lenders to offer borrowers who can't repay their loans on time a once-a-year option for an extended payment plan without additional fees.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho financial regulators are logging more complaints from consumers about the practices of payday lenders. The Idaho Department of Finance received 56 complaints about payday loans last year, up from 38 in 2011. The Idaho Statesman reports (http://bit.ly/13INm9e ) the agency also recently issued nine cease and desist orders against online payday lenders, with most targeting out-of-state websites. Payday loans are often considered a predatory form of lending because of their high fees and interest rates. Consumer Finance Bureau Chief Michael Larsen says most of the complaints from consumers are about illegally garnished wages or lenders pushing through unfinished loan applications. Lawmakers have tried but failed in recent years to impose limits on the industry. Idaho caps payday loan amounts at $1,000 but doesn't regulate interest rates.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — The state attorney general's office says Idaho residents are eligible for restitution from a Utah-based payday loan lender that was not licensed to practice in the state and attempted to garnish the wages of borrowers without a court order. Attorney General Lawrence says Flobridge Group, LLC has agreed to refund borrowers who sent the company payments after receiving collection notices, wage garnishment requests or court documents. The company agreed to the refunds as part of a settlement. Wasden says Idaho barred Flobridge Group from payday lending within its borders last year because the company wasn't licensed by the Department of Finance. Idaho claims an investigation found the lender hounded borrowers who missed payments with repeated calls, emails and texts to them and their employers while also threatening unauthorized legal action.