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“I felt like they were taking advantage of me:” Wisconsin lawmakers seek to curb payday lenders

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MILWAUKEE – More than $ 22 million in payday loans were issued in Wisconsin last year.

In some cases, the interest paid was more than the original loan.

Now a group of lawmakers want to curb payday lenders.

A woman says she regrets the loan she took out and contacted Contact 6.

“I felt like they were taking advantage of me,” Jasmine Gray said.

On CashNetUSA.com, Gray was approved for a loan and arrived the same day.

His relief was short lived.

“They sent me the contract and I was like, ‘Wait a minute, what? Is that how much I have to pay back?’” Gray said.

It turns out that Gray’s loan had an annual percentage rate of 338%.

The $ 800 she borrowed was going to cost her $ 2,342.

“So I said I would call Contact 6 and see if they can help me figure that out,” Gray said.

Contact 6 wrote to CashNet USA and shortly thereafter revised Gray’s payments, saving him over $ 1,000.

But she’s not the only person struggling with a payday loan. This is something lawmakers on both sides recognize.

“In some cases we are looking at an annual percentage rate above 500%. I think that’s excessive,” said Rep. Scott Allen.

Republican Allen and Democratic Representative Christine Sinicki introduced a 2019 bill to limit annual percentage rates on payday loans to 36%.

Last year, the average APR for all payday loans in Wisconsin was 528%.

“So many people have had to take out other loans to pay off their payday loans,” Representative Sinicki said. “It becomes a cycle.”

Almost 64,000 payday loans were issued in Wisconsin in 2019.

The number paid in full, on time, was approximately 33,000.

The average loan was $ 350.

They prey on people who are desperate, ”said Representative Sinicki. “They prey on the poor.

The bill also classifies payday lenders as financial institutions – more tightly regulated by the state.

Some lawmakers fear that restricting payday lenders could dry up the market.

“They provide a service and some people find that service valuable, and if we apply too many restrictions, that service is gone,” said Representative Allen.

The assembly session ended without the bill passing, but sponsors are hoping this will spark a conversation about a payday loan bill that can be passed.

“I don’t understand why it’s legal for them to do this,” Gray said.

Contact 6 has contacted several payday lenders for comment, but has not received a response.

Gray wrote to us in 2018 and around the same time we posted an article on CashNet USA and got this statement:

“CashNet USA provides the necessary credit options for Americans who have often been denied credit at a bank or credit union. Credit is risk-based.”

If you take out a personal loan, it is best to pay it off quickly because you will pay less interest.

If you have an APR over 500%, it can really add up over a year.

But, if you get a $ 350 loan and pay it off in just 14 days, a joint plan, you’ll only have $ 70 in interest.

That $ 70 is close to the average interest paid on payday loans last year.


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