A coalition of community groups in Kansas are looking to change the regulations for payday lenders in the state.
“Currently, payday loans in Kansas are supervised loans,” said Jeanette Pryor with Kansans for Payday Loan Reform. “They are not regulated and they are not licensed. A typical payday loan, the most commonly used, is a loan that the recipient has to repay within two weeks. If you calculate out the APR, it’s at about 391%.”
Four in ten Americans have no savings to help them weather a financial emergency. 175,000 Kansans a year use payday loans. Non-profit organizations are doing what they can to help already.
“Catholic Charities has the Loan Pool Project,” said Pryor. “They’re amazing people. They sit down and they help calculate the total amount that’s owed to the payday loan industry. They will, with the help of different partner banks, they will buy out the loan and then they reloan the money.”
In some cases, the interest rate is as low as 6%. Nevertheless, the group wants to see more oversight of payday lenders.
“We’re working on drafting a bill,” said Pryor. “The language will mirror that which passed successfully in Ohio last year and also elements from the Colorado bill that passed which is now law and has been for many years. We’re hoping to get a hearing. That’s our big Christmas wish.”
The Ohio law limits borrowers to one loan per lender and no more than $2500 total.