Big Banks Get Involved
KFTC member Jeff Hampton pointed out in a June 2011 letter to the editor, "The practices of Payday Lenders has become so lucrative that they are now being adopted by major financial institutions and banks." Jeff and the Center for Responsible Lending report that those banks include Fifth Third, US Bank and Regions, which operate in Kentucky, as well as Wells Fargo and Guaranty Bank.
The Debt Trap in the Commonwealth, a report by the Kentucky Coalition for Responsible Lending
KFTC supports fair and equitable lending practices. Working with the Kentucky Coalition for Responsible Lending, we've supported legislation to cap the interest rate on payday loans at 36 percent per annum.
Other states have already passed such caps and at similar or lower rates. Ohio caps the interest rate at 28 percent. Maryland capped interest rates at 33 percent and devised an alternative to this predatory practice – a Borrow and Save program that offers the poor low-cost loans between $300 and $1,000 at a rate of 7.99 percent.
It's time for Kentucky lawmakers to take similar action. So far, they have failed to pass bills introduced the last several legislative sessions.
KCC is hosting Prayer in Action days at the State Capitol each Tuesday during the 2017 General Assembly to pray for government officials and act on behalf of Kentucky’s most vulnerable citizens. Each week will focus on a particular justice issue.
Jan. 17 Responsible Lending