Payday Loans Called “Ridiculous”

That’s the statement from Chattanooga City Council member Carol Berz after that city’s Mayor’s Council on Women released a study on payday lending.

Here’s more from the Chattanooga Times-Free Press:

In a new assessment of short-term payday loans, the Chattanooga Mayor’s Council on Women said such loans cost borrowers too much, are too frequently rolled over and often hurt, rather than help, consumers meet their budget needs.

Chattanooga City Councilwoman Carol Berz, chair of the Mayor’s Women’s Council, called the 460 percent annual interest charge allowed in Tennessee for payday loans “ridiculous” and a contributor to Tennessee’s status as the top state in the country again this year for the rate of personal bankruptcies.

Tennessee Citizen Action has been a leader in calling on state lawmakers to better regulate payday lenders. In response to the report, executive director Andy Spears issued this statement:

Payday lending wreaks havoc on Tennessee families. Consumers seeking short term financial help too often get caught in an endless cycle of debt. This debt trap drains resources from families and local economies. Our lawmakers have so far been more eager to accept campaign contributions from payday lenders than to help Tennessee consumers in the debt trap. We have payday predators offer “first loan free” gimmicks like a drug dealer offering a free first hit. Too often, one loan for a small amount turns into months of debt and a cycle that results in big money for the loan sharks and wrecked finances for the consumer. The Tennessee General Assembly should take strong, decisive steps to rein-in the predatory payday lenders.

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For more on efforts to rein-in payday predators, follow @TNCitizenAction


 

 

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