The Wisconsin Catholic Conference has come out in support of legislation imposing reasonable limits on interest rates charged by payday loan stores, which under current law enjoy no limits on the interest rates they can impose:
Arguing “needy families in Wisconsin should not be abandoned to predatory practices most of us would find intolerable,” the Wisconsin Catholic Conference (WCC) is supporting legislative efforts to place stronger regulations on the payday loan industry.
The WCC is asking Catholics and others to support legislation such as Assembly Bill 392, which was introduced last week by over 55 co-sponsors. The proposal prohibits payday lenders from assessing finance charges that exceed 36 percent per year, and would give the Department of Financial Institutions (DFI) the authority to enforce the new regulations. Those who violate the regulations could be subject to fines, imprisonment, or both. Borrowers could also bring suit against violators to recover damages.
WCC Executive Director John Huebscher said that the Conference’s support of efforts to curb payday lending reflects the insights of Catholic groups that work directly with needy families. Catholic Charities agencies in Wisconsin, which offer family financial counseling services, are seeing an alarming rise in the number of individuals seeking their services due to the unregulated nature of the payday loan industry.
“The everyday experience of staff at Catholic Charities and that of parish-based volunteers with the Society of St. Vincent de Paul Councils offer powerful testimony that payday loans impose great hardship on families who already struggle financially,” Huebscher explained. “Their message is loud and clear. Our laws must do more to protect the poor in this area.”
I’ve read the arguments by those who support the current system of no limits on the interest rates charged by payday loan stores, and I’m in agreement with the WCC – our laws must do more to protect the poor from predatory lending practices.