Payday Loan Interest Cap Heads For Nebraska Poll | Politics
“We are determined to take a stand for our industry,” he said.
Earlier this week, Trina Thomas, owner of Paycheck Advance, filed a lawsuit in Lancaster County District Court asking for a change in the language that would appear on the ballot.
In particular, she objected to the inclusion of the term “payday lenders” in the language of the ballot, which was drafted by the attorney general’s office. His complaint said the term was not part of the proposed law and “unfairly presents the measure in a light that would undermine the vote in favor of the initiative.”
Critics say the offending loans often drag borrowers into a debt spiral, in which they can’t meet unaffordable terms and end up paying hundreds or thousands of dollars in fees over time. They fall further behind on bills and often lose bank accounts or even end up going bankrupt.
Last year in Nebraska, payday lenders charged an average of 387% annual interest and collected nearly $ 29 million in fees and penalties, according to a report from the Nebraska Department of Banking and Finance . The average loan was $ 346.
Industry officials say the proposed caps could kill their businesses and hurt people who can’t get credit elsewhere. The state limits transactions to $ 500 each, and people can only have two loans at a time.