Conference held in Pittsburg to push for payday and title loan reform
Group wants tighter regulations on loan companies
PITTSBURG, Kan. — Protesters in Kansas push back at what they see as predatory payday loans, and they want lawmakers to take action.
A payday or title loan is a loan with a high-interest rate and a quick payoff period, usually a month or less.
In Missouri, borrowers can take out $500 or less, with a payoff of 14 to 31 days, and interest and fees capped at 75-percent of the loan.
In Kansas, the limit is $500 and the maximum term is 30 days, but interest rates can be as high as 391-percent.
Something Pittsburg resident Bill Collier experienced first hand after his wife died of cancer six years ago.
He didn’t make much at the time, so he took out a title loan for a burial plot, and ended up paying $1800 on a $600 loan.
“It was a bad time. I was… didn’t have work at that time, I was looking for junk, doing yard work, odd jobs, anything I could to come up with the money to pay the loan off, so I didn’t lose everything. But I ended up losing my car,” says Collier.
He works part-time now and gets some assistance from the Wesley House in Pittsburg, and says life is looking up.
“Well, I’m homeless with my four dogs. Living out in the woods. But, I’m doing better now,” says Collier.
The hardship Collier experienced is something an advocacy group doesn’t want anyone else to go through.
“People want access to affordable loans, not debt traps,” says Marcee Bender with the Wesley House.
Kansans for Payday Loan Reform held a conference at the Wesley House to push for change.
“We hear the testimony of our folks, our seniors especially, that they needed to buy medicine, or they were low on food, and then they got into this trap, and every month they just could not get out of it,” explains Bender.
They want lawmakers to create stiffer regulations for the companies — to lower interest rates, increase the maximum payback time to six months, and lower monthly payback to five percent of a borrower’s payback.
“They have a place in the community. We’re not saying to get rid of them,” says Bender. “We’re just saying make them equitable for the people that are already in an economic situation that warrants them to have to use payday loans.”
Collier says he won’t ever take out another title loan but wants reform for friends that are stuck in the cycle.
“I have a friend that the last five years it’s cost him about half his paycheck every month, and they still have not been able to get out of that hole,” says Collier.
We reached out to Advance America, which has 43 locations in Kansas.
Jamie Fulmer with the company says their loans are designed to meet consumer needs, and their customers understand the costs.
He also says fixing interest rates won’t work in the market.
“Just because there is a rate cap doesn’t mean that any companies can afford to offer loans with that cap,” Fulmer said in a phone interview. “That can end up pushing customers away from the regulated market to the unregulated market.”
According to the Office of the State Bank Commissioner, in 2018, title and payday loans were worth 267-million dollars.
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