Potential bill proposes 36% interest cap on payday loans
NORTH PLATTE, Neb. (KNOP) - A group in Nebraska is trying to propose a bill that would put a cap on interest rates for payday lenders.
According to Voices For Children Executive Director Aubrey Mancuso the average interest rate for quick loans is 400% in the state of Nebraska.
In 2018 Nebraskans paid approximately $29 million on the fees alone.
The proposition would make it so lenders would only be able to charge 36%.
Mancuso said the loans are designed to make it hard for people to get out of debt.
“The loans are designed in a way that doesn’t allow families to get out from under them,” said Mancuso. “So, payday lenders rely on direct access to a borrowers checking account. So whatever happens they get paid on the next payday. In most cases if a borrower didn’t have $400 this week, they won’t have it again in two weeks and so-on and so-forth. So they just keep paying fees to take out another loan. In many cases this can last 6-10 years.”
The bill will be brought to the legislature within the next couple of weeks to decide if it will make the November ballot.
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