There is a new bill in Montana that is looking to cap the interest rates of payday loans at an annual percentage rate of 36 percent. Those supporting the bill say that Montana’s payday lending businesses are “preying on often-unsophisticated, desperate, poor people with excessive borrowing fees”.
I don’t know about you, but this sounds a little stereotypical to me. The bill’s sponsor, Rep. Bill Wilson, also commented that, “this industry thrives upon the victimization of vulnerable repeat customers.” The wonderful thing about payday loans is that they are there if you need them. Saying that the industry “victimizes” anyone is just ridiculous. It’s the consumers choice to use the payday loan service and are always informed about the stipulations of the loan.
The payday loan companies have created about 500-600 jobs. Bernie Harrington, a member of the Montana Financial Services Centers and owner of six businesses,stated,“Our clients made good competent decisions about their personal finances.”
Some other arguments against the bill are that payday loan lenders are lenders of last resort and are there to help those with jobs who have unexpected financial problems and only need to borrow a couple hundred dollars.
The committee has not yet voted on the bill. While supporters may feel like eliminating or greatly capping their payday loan capabilities will help, it will only cause citizens to lose their jobs and take away a reliable lending outlet. Payday loans are available to those who need short-term financial help and will hopefully be seen as the great service it is.
