Payday loan interest rate cap on November ballot


election wives tonight now we are focusing on payday loans used by millions of Americans but in many cases lenders have the power to put high interest rates on those loans News 5 Allison simmerman joining us live tonight to explain how proposition 111 on your ballot this November wants to limit the lenders power Allison Robin Elizabeth all across the nation these interest rates are in the hundreds and as people make their way to payday loan centers like the one you see behind me sometimes by the time they get paid that interest rate has put so much on that they can’t even make a payment on the loan all across Colorado Springs and the state you can find payday loan centers this is a continual thing and I almost want to say perpetual because the loan lasts for such a long time the idea is that people can get a small amount of cash usually no more than five hundred dollars with the idea that someone can pay it off quickly but that’s not always the case taking advantage of people you know it should be upfront you know a reasonable payment this November a question on your ballot will ask you if you think these interest rates should cap at 36% it’s a topic that lawmakers have debated across the nation and in Congress here in Colorado there’s not a registered opposition to this ballot question but on Capitol Hill concerns over lawmaker interests have come up on this issue according to the Center for Responsive Politics millions of dollars from payday loan lenders fund political action committees and individual politicians and currently payday loans don’t have much regulation at the federal level and obviously you know people that need money they’re probably gonna need it month after month after month wants to join 15 other states in DC by putting a cap on those interest rates in hopes of making things easier for people who take out those loans and many times you have to start back from scratch that’s the oil recovery and in 2010 the Colorado Legislature actually did address some of these payday loans reforms but nothing far as interest rates go they added things of not penalizing people when it comes to pre paying their balance things like that now if this passes it won’t have an effect on any of those reforms in place it’s just going to cap the interest rate always watching out for you southern Colorado Allison Zimmerman news 5 Allison

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