Editorial: Slow Down Missouri's Expressway to Debt

Lake Expo Online 
February 7, 2010

Weak regulatory laws in Missouri have led to an onslaught of abusive payday lending practices throughout the state, which ranks fifth in the nation in terms of number of payday loans issued per capita. Statistics show that there are an estimated 1,275 payday outlets up and running statewide, compared to fewer than 500 each in the neighboring states of Kansas, Illinois, Iowa, Arkansas, and Oklahoma. Short-term lenders often send borrowers into deeper debt, but legislation being introduced in Missouri would hopefully curb some of the most outrageous practices. Democratic legislators in the House -- Mary Still from Columbia and John Burnett from Kansas City -- are co-sponsoring a bill that would cap the annual percentage rate at 36 percent, prohibit companies from renewing loans and granting repeat loans within a certain time frame, and give the attorney general's office oversight of payday loan firms. While tough legislation is the surest way to regulate payday lending, other solutions are necessary for lower-income borrowers who need money. For example, credit unions can offer short-term lending at lower interest rates; and communities can provide emergency assistance funds.

Web Link
 

Abstract News © Copyright 2008 INFORMATION, INC.