In Louisiana, legislation sponsored in the state House by Rep. Ted James (D-Baton Rouge) and in the upper chamber by Sen. Ben Nevers (D-Bogalusa) aims to place a 36 percent limit on payday loan interest.
"The goal is to get Louisianians out of a debt trap. We see payday lending as a real drain on Louisiana's economy," said Andrew Muhl of AARP Louisiana, one of several groups involved in the Louisiana Coalition for Responsible Lending. According to the coalition, the average payday loan borrower in the state pays $270 in fees for an advance of $100, after taking out multiple loans to repay the original debt. Under the proposed bills, payday customers would pay less than $1.38 for every $100 borrowed.