Owens Continues Attempts To Cap Payday Loan Interest At 36 Percent

A Louisville lawmaker is again trying to put a 36 percent annual cap on payday loans in Kentucky.  The bill, sponsored by Representative Darryl Owens, went nowhere in two previous legislative sessions.  Owens expects to at least get a House committee hearing this year.

“We’re going to press on.  We anticipate and we’re very hopeful and we think that we’re going to get it out of committee, but we don’t want to take anything for granted.  This has been a three-year trap for a lot of us.  We don’t want to get this close and blow it,” he says.

Mary Love is an ordained minister in Oldham County.  She’s 65, retired and living on a fixed income.  Strapped for cash one year, she paid a payday lender $60 per month to keep floating a $400 loan.  She says it was nothing but a debt trap.

“I was sinking farther and farther into debt and knew that I had to do something to break out of it.  Altogether, I paid about $1,450 dollars in fees on a loan of $400,” she says.”

Owens knows he faces stiff opposition from payday lenders, who are lobbying hard to kill the bill. Kevin Borland, a payday loan industry spokesman, says the cap will put lenders out of business.  And he says there is no proof payday loans trap low-income Kentuckians in a cycle of debt.

“We fully acknowledge that these are not products that are right for everyone,” he says. “But if managed correctly, they can be a short-term solution to a problem.

By Tony McVeigh

Veteran broadcast journalist Tony McVeigh has been covering Kentucky politics since 1986, reporting for Clear Channel Communications before joining Kentucky Public Radio in 2004. His stories are aired by seven KPR affiliates, whose signals blanket the Commonwealth and parts of surrounding states. McVeigh began his broadcasting career at WRFC in Athens, Georgia, while earning a Bachelor of Arts in Journalism from the University of Georgia. He has extensive anchor/reporter experience, including stints with South Carolina Network and Georgia Radio News Service in Atlanta. In 2007 and 2008, McVeigh was named Best Radio Reporter in the Kentucky Associated Press Awards. He also picked up consecutive AP Awards for Best Political Coverage. McVeigh won four Kentucky AP Awards in 2009, six in 2010 - including Best Political Coverage and Best Hard News Feature - and three in 2011. His coverage of the 2007 Kentucky governor's race topped the Political Reporting category of the Society of Professional Journalists Green Eyeshade Awards of 2008. In 2009, McVeigh placed second in Courts and Law Reporting in the Atlanta-based competition for journalists in 11 Southern states. McVeigh is also the proud recipient of an Individual Liberty Award from the Kentucky Association of Criminal Defense Lawyers. The Brunswick, Georgia, native is a die-hard UGA football fan who enjoys photography, astronomy, live music, hiking Kentucky's Red River Gorge and exploring the state's beautiful back roads. McVeigh and his big, fat, black cat Simon, reside in Frankfort, KY.