Efforts to end predatory lending will culminate this week in Kansas City with a national day of action. Advocates expect federal guidelines to be outlined to protect people from costly payday loans.
Payday loans are something people know aren't good for them but they turn to them anyway in a jam. And in Missouri, that could mean an annual percentage rate of more than 450 percent.
The Consumer Financial Protection Bureau will hold a hearing about small-dollar lending on Thursday, June 2 in Kansas City at the Music Hall. They're expected to release proposed rules covering payday lending, auto-title loans and some installment loans.
John Miller is an attorney and a volunteer for CCO, Communities Creating Opportunities. He says the most common payday loan borrower is a woman with children living in a low-income neighborhood.
"The industry preys on our most vulnerable citizens. In Missouri, there are more payday lenders than there are Starbucks, Wal-Marts and McDonald's combined," said Miller.
StopTheDebtTrap.org is a nationwide movement to end predatory lending. The group is asking those affected by predatory lending to join their effort.
Jamie Fulmer is the vice president of public affairs for Advance America. He said the new guidelines could have devastating affects on the industry.
"The Bureau itself has estimated that there will be anywhere between a 65 to an 85 percent reduction in the volume, no industry could survive that type of impact. I think the consumer advocacy groups will be pleased but the customers that we serve will be disenfranchised," said Fulmer.
The national day of action will begin at 9 a.m. at Barney Allis Plaza and continue after the hearing with a national rally at 12:30 p.m.
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