This week on the economic fairness front:
1. Wolf in sheep’s clothing
2. Fewer protections for those in debt: OCPP report
3. Pulling the wool over our eyes
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October 13th
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September 15th
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1. Payday loan industry in Illinois plays the wolf in sheep’s clothing. In 2000, Illinois passed reforms affecting payday loans of 30 days or less. Within days, the industry circumvented the law with 31-day loans. Back at the bargaining table, advocates worked with industry to craft another reform law aimed at payday loans of 120 days or less. The Msgr. Egan Payday Loan Reform bill was signed into law in 2005. Unfortunately it didn’t take lenders long to find a way around the new Illinois law. A study released this week reveals that lenders have reinvented themselves again.
Lenders are evading the law and circumventing consumer protections by switching to high-cost installment loans. The study reveals how interest rates on installment loans, including loans that require equal installment payments, have shot up to 387 percent. The industry’s unfettered greed is proving very to be difficult to rein in with targeted reform. One more reason to support an interest cap on all consumer loans.
Chicago Sun Times, Oct. 16th. Find the study at Woodstock Institute.
2. A new report by OCPP, Who’s Getting Ahead?, reveals the impact of fewer protections for those in debt. The chapter on debt is filled with information about the high-cost credit market in Oregon. As the report states, “With no limit on certain forms of usurious loans in Oregon, some lenders are gaining irresponsible profits by making Oregon’s families and communities less stable and less capable of investing for the future.” The report offers great statistics that help tell the story and recommendations on how public policies can help create opportunities for Oregon families. Visit Oregon Center for Public Policy for the report.
3. Advance America, one of the nation’s largest payday lenders, offers to stop making triple-digit loans to military members...sort of. The announcement was part of a PR campaign to help Advance America improve their public image and attitudes toward payday lending. However, consumer advocates question the sincerity of the gesture given that they will continue making loans to part-time National Guard members and military families. Advance America is one of the largest loan operators in Oregon. An employee from a Portland based store confirmed that they will make loans to National Guard members who have another source of income and they will make loans to the spouses of military members.
When the new federal law goes into effect, all military members and their family, including National Guard, will be protected with the 36 percent cap. The State, Oct. 18th
Stand up for economic fairness for all Oregon families. Add your voice to the Economic Fairness Coalition.
1.) Spread the word. Forward this message to friends, colleagues or your membership list. Tell them to visit the web site to sign up and get more info. www.paydayloanfairness.org
2.) Learn more. Invite a speaker to come talk to your group about the Economic Fairness Coalition. Call Angela Martin at 503-239-8029.
3.) Help close the payday loan loophole. Make a contribution to fund the Economic Fairness Campaign. Learn more.
Payday Loan Fairness: [x] Yes, [] No
©2006 Our Oregon. All rights reserved. Photos by Leah Nash.