WASHINGTON вЂ“ U.S. Senate Democratic Whip Dick Durbin (D-IL), a longtime champion of legislation to rein in the predatory payday lending industry, today presented testimony to your home Financial solutions Subcommittee on customer Protection and finance institutions hearing on ending financial obligation traps when you look at the payday and dollar credit industry that is small. The subcommittee will talk about the Protecting customers from Unreasonable Credit Rates Act of 2019, a bill Durbin reintroduced yesterday that will get rid of the excessive prices and high charges charged to customers for payday advances by capping rates of interest on customer loans at a annual portion price (APR) of 36 percentвЂ”the same limitation currently in position for loans marketed to armed forces solution – users and their loved ones.
Complete text of DurbinвЂ™s prepared testimony is available below:
Chairwoman Waters, Subcommittee Chairman Meeks, users of the subcommittee: many thanks for enabling me personally to submit testimony about this consumer protection issue that is important. We all know that nearly 12 million cash-strapped Americans are charged rates of interest surpassing 300 per cent for pay day loans, and therefore the lending that is payday collects about $8 billion in charges every year because of this.
But there are two main figures that actually tell the tale concerning the payday financing industry in my situation: вЂњ75 %вЂќ and вЂњ10вЂќвЂ”75% of all of the costs gathered by the cash advance industry are created from borrowers who’ve been forced to restore their loans a lot more than 10 times in a offered 12 months since they lacked the capability to repay the entire loan. These numbers make the one thing clear: the payday lending business design was created to trap consumers in never-ending rounds of financial obligation that may end up in severe and irreparable harm that is financial.