A statewide fix for payday lending

What’s at stake:

Everyday Iowans are still reeling from the worst economic disaster in generations.  This economic crisis was driven by predatory industries that continue to work in Iowa with little or no regulation.  Payday lenders continue to take advantage of desperate situations, charging interest rates above 400% and trapping borrowers in an instant cycle of debt. 

What we’re pushing for:

Capping the interest rates on payday loans

 What is advertised as a short-term, hassle-free loan for an emergency often turns out to be anything but for families struggling to make ends meet.  Crushing interest rates exceeding 400% and loans due in full in just two weeks make it nearly impossible for many Iowans to escape a debt treadmill that arrives every payday.The maximum interest that banks and credit unions can currently charge on loans is 36% – payday loans should be capped at this amount as well.Payday lending is predatory lending dependent on repeat customers who become trapped in a never-ending cycle of debt.  These loans are toxic loans, setting Iowa families up for failure rather than building much needed wealth.Our legislature acted in 2007 to cap the interest rates on car title loans that were devastating families.  This issue is no different. Since then, five Iowa communities (Des Moines, Ames, Iowa City, West Des Moines, and Clive) have shown that something needs to be done by passing ordinances limiting these predatory businesses. The legislature should follow suit, cap the interest rates on payday loans, and break the cycle of debt caused by these toxic products.  Iowa families deserve no less.  <<Return to 2013 Legistlative agenda