Consumer loans need an interest cap | Letters to the Editor
I appreciated Jane Dow’s December 19 letter regarding payday loans in Minnesota. Payday loans are small dollar loans (typically $ 200 to $ 500) that become due and payable on the borrower’s next payday, with high fees and interest rates well over 200%.
At Minnesota Nonprofit Exodus Lending, we refinance payday loans and other predatory loans, without charging interest or fees to do so. If a Minnesotan comes to us with a lender – such as Payday America – $ 360, we refinance the loan, and the borrower pays us back over the course of a year at $ 30 per month.
Exodus Lending has served nearly 500 Minnesota residents, including residents of Blue Earth, Rice and Nicollet counties, since we started lending in 2015 and plan to continue to do so until laws are passed. to limit interest rates on payday loans.
Our overall goal is to advocate for fair and just lending policies in Minnesota so that no loan carries an interest rate greater than 36% APR.
As Ms. Dow says, 17 states already have such legislation and earlier this month the Illinois General Assembly passed the Predatory Loan Prevention Act which places a 36% cap on consumer loans. It should be noted that this was a bipartisan effort. It’s time to enact similar legislation in Minnesota.