Kansas representative Melody McCray-Miller, D-Wichita, will propose legislation to create a database to track payday loans and put a cap on annual borrowing amounts for individuals. She also wants to cap the annualized interest rate at 36%, which is similar to other state laws and a federal law that regulates lending to military employees.
Many payday loan borrowers get stuck in a cycle of taking out multiple payday loans just to pay off other payday loans. Borrowers can end up in a worse financial situation than they were in before they took out the initial payday loan. It is hoped that this legislation will prevent borrowers, especially the poor, from getting into an endless and expensive borrowing cycle.
This entry was posted on Friday, January 12th, 2007 at 12:10 pm and is filed under Bankruptcy and Predatory Lending. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.