We at Chicken-Fried News can agree that sometimes loans cause more harm than good. Voices Organized in Civic Engagement (VOICE), a local group of political and religious leaders, wants to put a stop to what many call predatory payday loans.
Payday loans are relatively small, short-term loans, usually $500 or less, with very high interest rates. Terms usually require applicants repay the loan, with interest and fees, from the clients next paycheck, which can result in a downward spiral of high-interest borrowing and debt.
Local community news blog Oklahoma City Free Press recently reported that, in Oklahoma, average payday loan interest rates (APR) are as high as 390 percent. Additionally, a Pew Charitable Trust study shows Oklahoma topped the list of payday loans in 2012.
During a recent press conference, VOICE member Angela Basse, coordinator of youth ministries at St. Charles Barromeo Catholic Church, spoke about her experiences as a child of a single mother who used payday loans to try to make ends meet, the Free Press news blog reported.
We missed out on book fairs in schools, field trips at school, because we didnt have the income, Basse said. Because we knew that we were having to pay back loans.
Fifteen states have already passed laws outlawing payday loans, and eight others have regulated interest rates and the number of loans companies can approve per individual per year.
VOICE members want to create a database of loans, limit the number of loans per person each year and lower the maximum interest rate allowed on payday loans.
Rep. Kevin Calvey, R-Edmond, and Rep. Mickey Dollens, D-Oklahoma City, have proposed House Bill 1596 and House Bill 1404, respectively. HB 1596 would create a database of loans, and HB 1404 would limit the payday loan interest rate to a cap of 60 percent.
While previous reform efforts havent been as successful as VOICE and others hoped they would be, this time lawmakers might have God on their side. Quoting scripture, Randall called predatory lending both unjust and evil.