Nebraska voters will decide whether to substantially decrease the cap on rates of interest for cash loans. This week the Secretary of State’s office affirmed there are sufficient signatures to place the issue on November’s ballot.
Delayed deposit loans are more popularly called money back loans – they also provide a business direct access to the borrower’s bank accounts, and they can charge interest rates of 400% or more.
“TThey’re basically supposed to be loans which are only profitable if a debtor can’t pay back them,” said Aubrey Mancuso, executive director of Voices for Children in Nebraska
She works with Nebraskans for Responsible Lending, the team that gathered the signatures.
“We see families in some instances wind up paying off a $500 loan for tires over the course of six years because of the fees that keep added on those loans,” Mancuso said. “And sometimes they end up actually having to take off other loans in the amount of thousands of dollars to pay back a loan that was initially only few hundred dollars.”
A federal law protects active-duty military families with a 36% rate cap. And Mancuso says 16 states and the District of Columbia have limited payday lenders to charging no more than about 36% increase. That’s what the Nebraska ballot initiative would do.
“Payday loans almost always make a bad situation worse,” Mancuso said. “And so I think as families are struggling economically we want them to have access to credit which’s fair, that helps them build for per year better future.”
The election is on November 3.