Montana voters cap payday short-term loans at 36%

[brentspeak]

36% is still ridiculously high, but better than 400%.

http://www.usatoday.com/money/perfi/credit/2010-11-04-payday04_ST_N.htm

By Sandra Block, USA TODAY

Montana voters overwhelmingly approved a ballot initiative Tuesday that limits interest rates on payday loans, bringing to 17 the number of states that have cracked down on the short-term, high-interest loans.

Payday loan borrowers typically agree to pay a finance fee — generally $15 or $20 for every $100 borrowed — and write a postdated check that the lender pledges not to cash until their next payday. Lenders say the loans provide emergency funds for consumers who don't qualify for other types of credit.

Consumer groups say the fees charged by payday lenders amount to annual interest rates of 400% or more. They also contend that payday lenders encourage customers to become repeat borrowers, forcing them into an endless cycle of high-cost debt.

The Montana initiative caps the interest rate on payday loans at 36%. The initiative also imposes a 36% cap on car title loans, which are similar to payday loans...

[The Wielding Truth]

1. See how well "free" market works?It doesn't. Regulation is necessary!

[RKP5637]

2. Ridiculous, absolutely ridiculous. n/t

[the redcoat]

3. Someone should see how Rand Paul feels about this

[Roma]

4. In Arizona we outlawed them altogether

as of July 1st 2010. It's nice to see the empty storefronts where those bastards used to do business.