| |
| |
|
|
|
|
|
|
|
•
|
Research payday cash advance lenders in your area
|
|
•
|
Instant approval low interest payday loan
|
|
•
|
Easy access to emergency cash
|
|
•
|
Calculate rates with our payday loan calculator
|
|
•
|
Explore faxless (no fax), no teletrack and military payday loan options
|
|
•
|
No credit check necessary for approval
|
|
|
| |
|
|
|
|
|
|
|
| |
Debate over Payday Loans Rages in Montana
|
By: Javi Calderon
Debate over Payday Loans Rages in Montana
On November 2nd residents of the State of Montana will have the opportunity to vote on four measures, one of which is an initiative to cap annual interest rates on consumer loans. Initiative-164, as it is called, is intended to cap annual interest rates at 36% in hopes to end what supporters call, “predatory lending.”
In the State of Montana initiatives make the ballot by petitioning for signatures. Since the measure was put on the ballot opponents have tried twice to have it removed, claiming that workers turned in false signature affidavits, that the ballot did not contain the full text of the measure, and that the petitions were unlawfully notarized.
On August 17th the Montana Supreme Court denied the Montana Consumer Finance Association’s request to have I-164 taken off the ballot. The MCFA then appealed the decision, but on October 7th District Judge C.B. McNeil once again denied their request.
The initiative is supported and funded by a group called 400 Percent is too High – Cap the Rate.
Montana already has regulations in place for payday loans and payday lenders. Under Montana State Law payday loan lenders are allowed to charge up to 25% of the total amount of the loan, and no loan is allowed to exceed 31 days. However, mathematically speaking, if a 31 day loan is rolled over 12 times – which would equal a year, and thus an annual interest rate – the 25% would become 400% because a new loan comes with a compounded interest rate.
Montana State law also states that cash advance loans cannot be rolled over because the borrow must pay back the initial loan before taking out a new one – so how the group has come up with 400% is hard to conceive.
These loans are not yearlong loans. They are month long, or two week loans, so the annual interest rate is an incredibly unfair barometer to measure them by. By comparison, if the measure passes, 31-day loans will be forced to carry an interest rate of around 2%.
Most loan lenders charge around $35 for a $300 month long loan. If the initiative passes the most a lender could charge for a $300 loan is $4, effectively making the transaction unprofitable.
A local consumer loan lender believes the initiative to be a form of prohibition, claiming that the goal of I-164 is specifically to put payday lenders out of business.
Interestingly, Cash USA Payday Loans, one of the largest and most respected companies in the industry, released their official guidelines for consumer loans this week. Within the statement they specifically articulate that payday cash advance loans are intended as solutions for short term financial problems, and that people with long term financial problems should consider other options.
Deferred deposit loans are one of the few avenues available to low-income consumers who have found themselves in a financial emergency. Banks do not offer short term loans, or loans for only hundreds of dollars, so people in need of money for unexpected medical expenses, or car/home repairs will no longer have anywhere to turn in the State of Montana.
|
|
|
| |
|
|
|
