A new study released by the federal Consumer Financial Protection Bureau confirms decades of other research finding that payday loans put borrowers at risk.  Thankfully, Pennsylvania's laws effectively keep these predatory two-week 300% APR payday loans out of its borders.

The findings, shown in the graphic to the left, reveal what has long been known: the terms of the payday loan product combine to create a debt trap by design. The CFPB study was based on an analysis of 15 million payday loan transactions over a 12 month period - data that was provided by the payday lenders themselves.

The study confirms the importance of upholding Pennsylvania's strong laws, which effectively prevent the payday debt trap from flooding into our neighborhoods.  Data revealed that:

• Payday loans carry on average a 339% APR
• 1 out of 4 payday borrowers borrowed against their public benefits, such as Social Security Income, or retirement funds as collateral for the loan.
• The average borrower is stuck in payday loan debt - with a single company - for nearly 200 days.
• Borrowers taking out 10 or more loans a year account for 75% of payday lenders' revenue. 

With these findings confirming not only the decades of research by others, such as the U.S. Department of Defense, Pew Charitable Trusts, Center for Responsible Lending, but also the experiences from states that, unlike Pennsylvania, have legalized 300% APR, two-week payday loans, it is more important than ever to uphold Pennsylvania's existing strong laws. 

Right now, Pennsylvania's neighborhoods are free from payday loan storefronts that trap Pennsylvanians in a long-term cycle of debt. 

As the new legislative session gets underway, out-of-state payday loan companies, and their high-paid lobbyists, are pushing hard to legalize 300% APR payday loans in our state. 

Join us to help protect Pennsylvania's existing strong laws and prevent storefronts like these from flooding our communities.

Thanks to all of you, the bill to authorize 300% APR payday loans in Pennsylvania stalled in the Senate. It did not even have enough support to advance out of the Banking and Insurance Committee.  Thanks to all of you, our communities will not be flooded with payday storefronts and high-cost dangerous payday loan debt. 

In a recent recap of the bill status in the Patriot News, committee member Senator Pat Vance (R-Cumberland County) noted her opposition to the bill stemmed from hearing the concerns of a broad coalition of what she considered worthwhile groups representing the military, churches, senior citizens and low-income residents. Thank you, Senator Vance, for hearing these concerns!

Groups in Philadelphia, such as the Philadelphia Unemployment Project  shown above, have been personally thanking members of the Philly delegation for their opposition to the bill, including committee members Senator Farnese, Senator Stack, and Senator Williams.    Other committee members who publicly expressed their opposition include Senator Earll, Senator Greenleaf, Senator Rafferty, and Senator Boscola.   Thank you, Senators, for keeping high-cost debt out of the Commonwealth!

Thanks to all of you, Pennsylvania's Senators heard and followed the concerns of their constituents rather than the those of the out-of-state payday lenders who want to peddle 300% APR loans in your community.   Please thank your Senators for making the right decision to stop payday loans by stopping HB 2191! 

 

_Play it. Learn the truth.  Call your Senator today.  Tell your friends.  Have them call too.  Act today, before your Senator returns to Harrisburg, where the big payday lenders will circle their office day in and day out.  

 Let them know that voters at home think 300% interest rates are wrong.  Plain and simple.  No amount of smoke or mirrors can hide that fact.