The harsh payback of payday loans

Payday loans and cash advances are becoming more and more common here on the islands as the cost of living continues to surge… But with sky-high interest rates.. Some wonder when does a helping hand turn into a vicious cycle of debt and loans. KITV 4’s Pete Caggiano joins us with a proposal to reel in those loans… That’s right Senate Bill 737 looks to cap the annual interest on a so called payday loans to 36%. Tony Torres 25:28-32 “THE PAYBACK IS OUTRAGOUS BUT I’VE ONLY USED IT FOR EMERGENCY USES” Tony Torres never WANTS to use pay day loans but like many who sometimes run into a pinch… It’s your emergency option. tony Torres 26:04-09 I HAD TO MAKE THE LOAN GOT TO DO WHAT WE GOT TO DO TO SURVIVE The price of survival is high… So high according to a 2005 State Auditor report you could pay a whopping 459% apr for a $100 dollar 14 day loan… Something lawmakers are looking to change. rep. Justin Woodson 2:42-50 THEY ARE SOME PREDATORY PRACTICES THAT ARE HAPPENING SO WHAT WE’RE TRYING TO DO IS FILTER OUT THE BAD PRACTICES FROM THE GOOD PRACTICES A new Senate bill would do just that. 20:40-52 pete Caggiano PROPONENTS OF CASH ADVANCE SERVICES LIKE THE ONE BEHIND ME SAY IF MORE RESTRICTIONS ARE PUT ON THEM THEY MAY LOSE THEIR PROFIT MARGIN AND HAVE TO SHUT DOWN SHOP, LEAVING THOSE THAT RELY ON THEIR SERVICES HIGH AND DRY. Dollar Financial Group who operates 9 Money Mart stores in Hawaii says the new law could put them out of business KERRY PALOMBO DOLLAR FINANCIAL GROUP, INC. ) So just how high is too high for those who don’t qualify for more traditional lines of credit. rep. Justin Woodson 5:10-23 THE QUESTION IS FINDING THAT SWEET SPOT WHERE THE BUSINESS IS STILL VIABLE TO THEM SO THEY CAN CONTINUE TO OFFER THEIR SERVICE BUT AT THE SAME TIME DO SO IN A WAY THAT’S RESPONSIBLE TO THE CONSUMER tony Torres 26:29-33 I THINK THEY GOING TO MAKE ENOUGH THEY ALWAYS HAVE A PLAN FOR THEMSELVES 15 states and the District of Columbia have either banned or restricted pay day loans interest to 36% or less. Now one interesting fact Representative Woodson says that 80% of those who use payday loans could qualify for other types of more traditional

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