Overview

Board

Staff

Supporters

Storytelling Map

Values in Operations

Voices of Appalachia

Finances

Appalachian Transition

Enterprise Development

Forestry

Research and Policy

How$martKY™

Energy Efficient Enterprises

Appalachian Development Alliance

Appalachian Transition Initiative

Central Appalachian Network

Kentucky Center for Economic Policy

Kentucky Solar Partnership

Kentucky Sustainable Energy Alliance

Working Poor Families Project

Voices of Appalachia

Storytelling Map

Publications

Resources for Business Owners

Tools for Landowners

Videos

News Releases

Media

Media Room

Contact Information

Social Media

Feedback

Directions to MACED

Employment Opportunities

Overview

Appalachian Carbon Partnership

Center for Forest and Wood Certification

Kentucky Forest Landowner's Handbook

Our Forests

Tools for Landowners

Overview

Publications

Policy Resources

Coal Severance Fund

Kentucky Center for Economic Policy

Overview

About How$martKY™

An Energy Audit Example

Homeowner Examples

Contractors' Corner

Customers' Frequently Asked Questions

How$martKY Newsletter

Contact

Start Here

Utility Charges Explained

Tools and Calculators

Ways to Save at Work

Energy Saving Fact Sheets

Building Contractor Capacity

Paying for Improvements

Success Stories

Energy Links

Glossary

Contact Us

About Us Programs Projects and Collaborations Resources News Contact Us Home
MACED logoMountain Association for Community Economic Development
Enterprise Development Forestry Research and Policy How$martKY™ Energy Efficient Enterprises

New Report Details Economic Cost of Payday Loans in Kentucky Counties

 

Payday lending debt trap strips Kentucky consumers and their communities, urban or rural, of millions of dollars each year.

 

February 23, 2010

 

FRANKFORT, Ky. — Today the Kentucky Coalition for Responsible Lending (representing 64 KY organizations) released a year-long study on the economic impact of payday lending across the state’s 120 counties. House Bill 381 remains locked in House Banking & Insurance Committee and KCRL called on Chair Representative Jeff Greer to give the bill a fair hearing.

 

KCRL’s report, “The Debt Trap in the Commonwealth: The Impact of Payday Lending on KY Counties,” is the first comprehensive look at documenting the economic damage of payday lending in Kentucky counties. KCRL Chairperson, Amy Shir, said the report delivers concrete facts that support capping payday loans at 36 percent. Shir added, "The people of Kentucky and their communities will be better served by limiting payday loans to a 36 percent rate cap.  It is the right thing to do and is an example of sound public policy."

 

Key Findings Include:

• The economic impact of payday lenders is costly in both rural and urban communities. Louisville Metro was home to 132 lenders who collected nearly $27 million in predatory fees in 2008, but the magnitude of impact is even stronger in Mason County, home to less than 10,000 people and 8 payday lenders who collected $1.6 million in predatory fees in 2008.

 

• The majority of payday lenders in Kentucky are nationally owned and their profits leave the state.

 

• Payday lenders locate in places where people are most likely to need access to small-dollar short term credit—but low- to moderate-income families are also least likely to be able to repay the loans within the two-week term.

 

KCRL supports House Bill 381 because it will bring Kentucky in line with the same protections Congress passed to protect military families with a 36% interest cap on most loans.  The county data in this report strongly suggests that Kentucky should consider this an economic priority during the deepest national recession since the Great Depression.

 

According to Reverend J. Richard Sullivan with CLOUT, "Payday loans violate the biblical mandate against usury, especially when committed against the poor. KCRL represents tens of thousands of Kentuckians who are calling for a 36% rate cap on payday loans—in fact, the largest gathering of citizens last year in Louisville to address any community problem (nearly 1600 people affiliated with CLOUT) was to call for this rate cap—and CLOUT will gather another 2000 in Louisville next month to call for it again."

 

The Coalition's report “The Debt Trap in the Commonwealth: The Impact of Payday Lending on KY Counties” was distributed to all members of the General Assembly and Governor Steve Beshear. The report is expected to assist state Representative Darryl T.  Owens (D – 43) and his co-sponsors' work to pass House Bill 381 calling for a new 36% APR cap on payday cash advance loans

 

Click here to download report.

 

Photo of Alabama Governor Bob Riley presenting award to Justin Maxson, Maced President.

Melissa Fry Konty, MACED’s research and policy associate and author of the report, addresses the press and attendees at the capital. Click here to download report.