Payday Lenders Come Under Fire

From the Seattle Post Intelligencer:
“States should do more to restrict payday lenders, who pocketed $4.2 billion in fees from borrowers last year, according to a report released Thursday by the Center for Responsible Lending.”

Payday loans, which offer quick cash secured with the borrower’s paycheck, can saddle borrowers with huge fees and interest, ” sometimes as much as 800 percent.” The numbers in the report are staggering—the average payday borrower pays back $793 for a $325 loan.

“Consumer advocates want states to limit the annual interest rates charged on payday loans to no more than 36 percent — similar to a cap on payday loans to military personnel that Congress passed this fall.” The industry, naturally, is against such a rate cap. 11 states ban payday lending altogether. —MEGHANN MARCO

More controls urged on payday lenders [Seattle P-I]