For Immediate Release
September 13, 2019
Nebraskans Aim to Lower Payday Lending Interest Rates from 404% to 36%
2020 Ballot proposal would end predatory payday lending practices
LINCOLN, NEBRASKA – A group of Nebraskans filed a ballot measure today that would lower annual interest rates on predatory payday loans to 36 percent. In Nebraska, payday lenders currently charge over 400 percent annual interest on loans that are designed to trap people in long-term cycles of debt. Though the loans are marketed as short-term, borrowers are commonly unable to meet the unaffordable terms and end up paying hundreds or thousands of dollars in fees over time, falling further behind on their bills and often losing bank accounts or even filing bankruptcy.
Payday lenders stripped $28 million in fees alone from Nebraskans in 2017. Borrowers averaged 10 loans per year for a high-cost product marketed as a short-term solution.
“Consumers in Nebraska should be able to access credit that is fair and responsible. Unfortunately, the current law permits payday loans that are harmful and lock people into a debt cycle that is hard to break free from,” said Aubrey Mancuso of Voices for Children, who is part of a coalition supporting this effort. “It is past time for this measure, which would allow the people to take direct action and vote on this simple, effective measure: a 36 percent cap on annual interest rates.”
Sixteen states plus the District of Columbia have already stopped payday lending by enforcing caps of around 36 percent. Voters in Montana, South Dakota, and Colorado passed interest rate caps by ballot measure with over 70 percent approval in each state. Congress passed a 36 percent cap for active duty military personnel after the Department of Defense reported payday lending was negatively impacting military readiness and the morale of the troops.
“It is great that our military is protected. We need the same protection for veterans, teachers, first responders, and other Nebraskans who work hard to support their families and do not deserve to be subject to these exorbitant rates,” said Mick Wagoner, director of the Veterans Legal Support Network and member of the ballot committee. “It is a matter of fairness and it serves the interests of strong families and a strong economy.”
James Goddard of Nebraska Appleseed, another member of the coalition stated, “Many in our state are dealing with financial struggles and living paycheck to paycheck. Rather than helping consumers, payday lenders make things worse for hardworking families. This measure would stop these predatory lenders from inflicting serious financial harm on people who are already struggling to get by.”
The next step is to gather the necessary signatures from Nebraskans to get the measure on the 2020 ballot.
This effort is supported by many Nebraska organizations committed to stopping the payday loan debt trap. Coalition members include: AARP Nebraska, the ACLU of Nebraska, Community Action of Nebraska, Habitat for Humanity of Omaha, Heartland Workers Center, Lending Link, the National Association of Social Workers – Nebraska Chapter, Nebraska Appleseed, Nebraska Children’s Home Society, Omaha Together One Community, Voices for Children in Nebraska, the Women’s Fund of Omaha, Youth Emergency Services, and YWCA Lincoln.
For more information or to connect with coalition partners contact Julia Tse at 402-597-3100 or firstname.lastname@example.org.
Mary K saysSeptember 14, 2019 at 3:04 am
This definitely needs to happen. Sooner than later.
Beatty Brasch saysSeptember 16, 2019 at 7:31 pm
Thank you for taking a leadership role in this very important issue of Pay Day Lending. . Let me know what the Center for People in Need can do. Angela Amack is our lobbyist and let me know if she can help.