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Ethics watchdog issues report on payday loan industry lobbying
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It has become a cycle of despair for low-income residents with poor credit scores: They take out a high-interest installment loan to tide them over in tough times and soon accumulate an unmanageable load. They pay off old debt with new loans at rates of up 175 percent. For years, state lawmakers have unsuccessfully tried to introduce legislation capping the interest rate for such loans at 36 percent. Their efforts have failed repeatedly. An attempt last year to forge a compromise — with a 99 percent cap on the smallest loans, of up to $1,100, and 36 percent on higher amounts — stalled in the House of Representatives.