The economic self sufficiency of working low to moderate income families is directly related to their ability to effectively nurture and educate their children. Since the success of families in that endeavor will have a profound influence on the future economic well being of our community, it is in our self interest to support public policies that promote family financial stability.
Helping families to effectively use mainstream financial services (banks and credit unions) is an essential element in achieving economic self sufficiency. The rapid growth of the alternative financial services industry (cash advance, payday loan, check cashing, rent to own, etc.) is undermining the efforts of our community’s working low to moderate income families to provide the basic necessities required for self sufficiency. Although marketed to the consumer as a source of emergency funds, these business enterprises thrive by attracting a significant number of their borrowers to return multiple times over the course of a year where they will pay an annual percentage rate of interest of over 400%.
Public officials in Kentucky who are concerned about the growing challenges of working low to moderate income families should enact restrictions on payday loans that are consistent with the 36% cap that the federal government imposes on what can be charged to military personnel. If you believe that the payday loan industry is bad for Kentucky’s families, tell state representatives, Jim Glenn and Tommy Thompson and state senator David Boswell and ask them to support a 36% cap on pay day loans.
BigRed
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There has definitely got to be a line drawn on these "advancements"! They are taking advantage of the underpriviledged and underpaid! Where does the logic behind 36% come from? Not being facetious, but why not 20% or 15%? I don't know? Maybe I am naive to the fact that there are high interest rate loans out there, but the numbers are quite gluttonous!
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