Minnesotans wept on Wednesday as senators discussed what to do about the issues with loans. Some people were upset because lawmakers proposed ending short term “pay day loans.” Others cried because the loans have gotten them into serious debt.
The end result was limiting Minnesotans to 8 loans per year.
Renee Bergeron of Duluth, a single mother of four, told committee members that she had found herself in need of money.
“It is just a bait,” she said because of the hole that payday loans had dug her into.
“It just started spiraling,” she said, “When it was all said and done, I was paying at least $600 each paycheck.”
Texas Payday Loan News: Debate Ongoing in Minnesota
The following is a digest of a story originally appearing at TwinCities.com. The Texas CLC is posting this summary as a public service for Texans interested in meaningful payday loan reform in our state.
Teri Frye of Blaine felt differently. She said that since she does not make enough as a Target cashier with a teenager to raise, she turned to pay day loans to get her through.
“I know things are different at the Capitol than the real world where life happens,” Frye said, but in the real world people sometimes need financial help. “I don’t have time to come down here to St. Paul and ask you not to take away my financial rights.”
Restricting loans “hurts thousands of people in my position,” she said. “If Payday America is gone, I have no idea what I will do.”
According to Frye, she borrows $150 at a time and pays Payday America $178 back. She feels that this is a fair interest rate..
Cherrish Holland of the Willmar Lutheran Social Services office feels just the opposite.
She told the story of a woman who blamed payday loans for “sinking her credit score and self-esteem to all-time lows.” The woman apparently took out a $500 payday loan and had to pay $80 dollars a paycheck for an entire year.
The strong payday loan regulations, suggested by Sen. Jeff Hayden, were rejected. These regulations would have limited Minnesotans to five short-term loans per year. Sen. Paul Gazelka, R-Brainerd, suggesting restricting these loans to 12 per year. It was also suggested that lenders be required to be absolutely sure that the customer has the ability to repay loans.
Gazelka, Reinert, Hayden and others were urged by Senate Commerce Chairman James Metzen to work out a compromise before the Senate vote.
“Both sides make very strong cases,” Gazelka said.
Sherry Rasmusson of Wayzata said on behalf of those who support payday loans: “I just want to thank God for Payday America.”
“Not all loan companies are the same,” she said. “I have been scammed by loan companies,” especially those on the Internet.
Stuart Tapper of Unloan and Unbank, says, “At Unloan, we do not exceed 25 percent of income,” he said of interest rates charged customers. “Our customers know exactly what they are going to be charged.”
Read the original story here.