Dear Economic Fairness Supporters,
This week we learned three important facts:
1. Military at war with predatory lenders
2. Troops support a cap on interest
3. Groceries at 500%
View other alerts.
_____________________________________
1. Department of Defense (DOD) calls on Congress to pass an interest cap 36 percent on all loans to military members
Has the Department of Defense joined the coalition? Well we haven’t received the endorsement form yet but the DOD is two steps ahead of Oregon when it comes to supporting policies that establish real and permanent protection from predatory lending. The DOD called on Congress to cap loans to members of the military at 36 percent. This includes payday, car title and installment loans.
The report estimates that the predatory fees charged by payday lenders is costing military families more than $80 million a year. The report goes on to point to Oregon as one of the states where the debt trap continues despite laws aimed at curbing the abuse. “The report notes that Oregon’s new 36 percent cap on payday loans does not take effect for another year, yet payday lenders are already switching to a different consumer lending license that allows them to skirt the interest cap.” The Oregonian. August 17, 2006.
2. Polling: 74 percent of military service members agree government should cap interest rates
We already know 72 percent of Oregon voters support capping interest on payday loans (a fact that was noted in the DOD report). Now we know that support for interest caps is even higher among men and women in uniform. Polling conducted by the Consumer Credit Research Foundation in June 2006 reveals that 74 percent of service members agree that government should limit interest rates lenders can charge, even if it means fewer people will be able to get credit.
3. Pay 500% APR for a bag of groceries? High-cost loans for low-price groceries.
Bi-Lo, a large discount grocery store chain operating 300 stores in the South is introducing a buy now pay later program for your groceries. Under the program, a customer may purchase up to $200 in groceries on credit. The total due, including fees, would be automatically deducted from their checking account on their next payday. The fees are high. A $50 purchase would cost as much as $9.99 for as few as 7 to 14 days. At that rate, annual interest on a $50 bag of groceries would exceed 500 percent. And just who is behind this business scheme? First Bank of Delaware, a bank that has been in trouble with state and federal regulators for evading predatory lending laws in numerous states.
No word yet on Oregon stores rolling out this program. The Charlotte Observer. August 15, 2006.
We need you to join the fight! No, we aren’t recruiting for the military but we do need your help to win economic fairness for all Oregon families.
Payday Loan Fairness: [x] Yes, [] No
©2006 Our Oregon. All rights reserved. Photos by Leah Nash.