Contact Representative
Regulate Pay Day Lenders
House Bill 3301
The payday lending bill (H. 3301) may come up for debate on the S.C. House Floor as early as Tuesday, February 10.
It is critical that House members hear from their constituents that: "The bill reported out of Labor, Commerce, and Industry Committee (LCI )
does not go far enough to protect consumers of these predatory loans.
Please support strengthening amendments to stop the cycler of debt and to lower the amount that lender can lend to an affordable amount."
Payday loans, typically two week loans for $300 at 391 % APR under current law,
create suffering in three main ways:
- Borrowers are trapped into multiple loans at a time. We've seen borrowers with up to 22 payday loans out at one time. The LCI bill does stop multiple loans by limiting borrowers to one loan at a time, enforced by a third party database.
- Serial borrowing.
- Borrowers can't pay back the loan on time and pay the rent and buy food and gas. So, they take out another loan and another loan. Even where borrowers are limited to one loan at a time, 60 % of loans go to folks who take out more than 12 loans in a year--half the year in what is supposed to be a one-time emergency loan.
The LCI bill would allow borrowers to take out 26 two-week loans in a year--paying $2,340 in interest to re-borrow the same $600 every two weeks.
Although the bill provides for borrowers to be able to enter an Extended Payment Plan during which borrowers could pay off a loan while no more interest accrued, it doesn't define what the plan has to provide.
Borrowers take out loans that they can't possibly pay back in the two week term of the loan.
The LCI bill would allow loans up to $600. A single parent with two children making less than $46,000 would have to pay over half her take home pay to pay off the loan when it is due.
It is going to be a tough fight to strengthen this bill. House members must hear from their constituents that the payday lending bill does not go far enough and needs to be strengthened and that it matters to those constituents. We will launch a strong bipartisan effort to add strengthening amendments.
Thanks for your help and please let us know what your representative says when you call.
Legislative Contact info: http://www.scstatehouse.gov/html-pages/housebios.html
-- Adapted for use. -- John C. Ruoff, Ph.D. Research Director South Carolina Fair Share 2001 Assembly Street - Suite 107 P.O. Box 8888 Columbia, SC 29202 803-603-3224
