The exploitation of the poor through payday loans in America is one of the most underreported stories of 2013, even within the alternative media world. I first wrote about it and the role our big bailed out banks play back in February in my piece: TBTF Banks Enter Payday Loan Business with 500% Interest Rates.
The problem with stories like this getting such little coverage, is that the trend will invariably spread like a cancer without public awareness and outrage. Take Pennsylvania for example. The state has laws that make payday loans illegal, but state legislators want to do away with this. They made their first attempt back in 2012 with House Bill 2191, which never made it to the floor for a vote. Not being the types to take no for an answer, the state legislators are back. This time state Sen. Patrick Browne is looking for co-sponsors for a bill that would allow punitive interest rates under the guise of calling it micro-lending. From the Post-Gazette:
“A rose by any other name” equals a rose.
“Put lipstick on a pig” equals a pig.
“Micro-loan program” equals a predatory payday loan/debt trap.
Seeking to protect vulnerable people from being trapped in a vicious debt cycle, Pennsylvania has long outlawed the usurious practice of predatory payday loans.
However, lenders are trying to undo these limits. Last year, House Bill 2191, which would have undone this 100-plus-year-old protection, thankfully never made it to the floor for a vote.
While no such legislation has yet to be introduced, state Sen. Patrick Browne, R-Allentown, is seeking co-sponsors. Rather than calling it “payday lending,” it is touted as a “micro-loan program” promising a “reasonable annual percentage interest rate” to “eliminate the endless cycle of debt,” to “strengthen consumer protection” and to “protect our military families and veterans.”
If you’d like to read Sen. Browne’s proposal, click here, but I think the first bullet says it all.
- Reasonable Annual Percentage Interest Rates – The bill limits each loan to a simple annual interest rate of 28%. Each loan would have an application fee and a processing fee of no more than 5% of the loan amount respectively. Application fees would have further dollar caps based on the size of the loan. Both fees have been previously authorized by the General Assembly for other loan products or the concepts have been accepted by Federal regulators such as for federally-regulated credit products such as short term loans by credit unions or annual fees for credit cards.
Yep, bailed out banks can borrow for basically nothing from the Federal Reserve, but peasants in PA should feel grateful for “reasonable” 28% loans. What a feudalistic joke this nation has become.
Full Post-Gazette article here.
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