Debunking McCoy’s payday lending excuse

Responding to dozens of CCI members urging him to move this bill, McCoy stated that he’s worried about payday loans obtained online:

“Computer generated loans, like Iowa payday loans are not capped and provide for high interest rates for short-term loans to consumers. Until a Federal reform of payday lenders passes the United States Congress, any effort to cap Iowa lenders will not work.”

Luckily for him our bill addresses that!

We checked with the Iowa Attorney General’s office and our friends at the Center for Responsible Lending and, in fact, our bill already addresses much of this problem for two simple reasons:  

  1. Any payday lender doing business in Iowa must abide by the state’s usury laws.  For example, online lenders like Ace Cash Express cannot offer a resident of New York (where interest rates are currently capped) a payday loan exceeding 36% APR.
  2. Any online payday lender that flaunts the law and would still offer a triple digit interest rate loan to an Iowan would find that the terms of their loan are unenforceable.

Now is the time for Senator McCoy to understand this fact as well and bring our bill up for debate.

Join other CCI members and tell McCoy it’s time to crack down on payday lenders today.

 

 

To read our original post on the bill “Why is McCoy standing in way of payday lending bill?”, click here.

 

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