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.