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Congress should cap interest on pay day loans

Congress should cap interest on pay day loans

Individuals residing in states with limitations on small-dollar loans will likely not suffer. Alternatively, they’re not going to be exploited and taken advantageous asset of, and they’ll handle while they do in places such as for instance nyc, where loans that are such never ever permitted.

Patrick Rosenstiel’s recent Community Voices essay claimed that interest-rate cap policies would develop a less diverse, less comprehensive economy. He shows that “consumers who check out small-dollar loan providers for high-interest loans are making well-informed alternatives for their individual monetary wellbeing.” I really couldn’t disagree more, predicated on my several years of working together with Minnesotans caught in predatory and usurious pay day loans. A nonprofit that refinances payday and predatory installment loans for Minnesotans caught in what’s known as the payday loan debt trap, my perspective is, from experience, quite different from that of Rosenstiel as the director of Exodus Lending.