St. Paul, MN- Today, the home Commerce Committee authorized bipartisan legislation to handle a harmful period of financial obligation brought on by predatory payday lending. Rep. Jim Davnie (DFL-Minneapolis) delivered HF 1501 , which may cap the attention price and fee that is annual payday advances at 36%. Minnesota Attorney General Ellison testified meant for the legislation.
вЂњHF 1501 is really a good sense solution to predatory financing inside our state,вЂќ stated Rep. Davnie. вЂњHardworking Minnesotans deserve and need usage of safe and accountable resources, maybe not a method built to just take them in and milk their bank records within the term that is long making them worse off and without funds to pay for fundamental cost of living. ItвЂ™s high time Minnesota joins those states that place reasonable limitations regarding the prices of loans for struggling customers.вЂќ
A former payday borrower, advocates, and experts described the financial destruction caused by loans carrying 200% to 300% annual interest rates with unaffordable terms that create a cycle of debt at a public hearing. Sixteen states as well as the District of Columbia limit yearly interest on pay day loans at 36% or lower to disrupt this period of financial obligation. Congress passed the same 36% cap on loans to active-duty military in the urging of this Department of Defense, following the DoD reported economic damage from pay day loans therefore significant so it impacted readiness that is military.