AARP Looks to Legislate Payday Loans

November 12, 2013
The Advocate (LA) 
payday lending news

The AARP is preparing to propose legislation that would limit the long-term interest rates for “payday” loans in Louisiana, after a survey found support for this effort among 60 percent of voting-age state residents.

“We want legislation to cap the interest rates at 36 percent,” said Andrew Muhl, director of advocacy for AARP Louisiana. “That’s the cap the federal government put on payday loans for active military personnel. It brings Louisiana in accordance with federal law for active military.”

The annual percentage rate (APR) for the average payday loan is 782 percent in Louisiana, according to Muhl. Payday lenders argue that Louisiana interest rates already are capped, since interest rates on a defaulted loan cannot exceed 36 percent. By adding lending and documentation fees, however, the annual percentage rate can climb much higher. If a customer borrows $100 and pays a $15 fee, adding other loans, fees, and increased interest over a year, the annual percentage rate could reach 700 percent APR. In a survey of 600 Louisiana residents, 58 percent said they would be more likely to vote for a candidate that supports capping payday lending.










Abstract News © Copyright 2008-2013 INFORMATION, INC.
Powered by Information, Inc.

Stay Updated

Join the fight against predatory lending. Enter your e-mail to sign up for breaking news, action alerts, and CRL's original research.

   Please leave this field empty
  

Help Us End Predatory Lending

Predatory lending destroys family wealth, and preys on our most vulnerable communities. You can help us end abusive lending practices by donating to CRL, or by sharing our work with others.



`