“This Can’t Be Legal”
NPR is out with a report on the debt trap caused by payday lending loan sharks:
A few years ago, a man came to pastor Wes Helm at Springcreek Church in Garland, Texas, and opened up about his financial troubles. Helm looked through the man’s budget and noticed one major monthly expense: a payday loan fee three times more than the amount of the loan itself.
“I thought, this can’t be legal,” Helm said.
The report details the high cost of these predatory loans:
The average loan is $375, rolls over into new loans for five months, and racks up $520 in fees and interest payments.
“Borrowers want three things: lower prices, small installment payments, and quick approval,” said Alex Horowitz, a senior researcher with Pew.
Tennesseans face similar challenges with the legalized loan shark industry — high fees, long-term debt, and a trap they can’t escape. Tennessee families spend over $400 million a year in fees paid to payday and car title lenders.
That’s why Tennessee Citizen Action is supportive of the CFPB’s new proposed rule on payday and car title loans.
For more on how you can help stop the debt trap caused by payday predators, follow @TNCitizenAction