Former Hays resident Annie Ricker was confident she could quickly repay $ 750 borrowed from a payday lender to meet unforeseen medical and auto expenses.
By the time the debt was settled, Ricker had paid the lender over $ 3,000.
Ricker, pastor of the United Methodist Church in Berryton, joined about 20 people in Topeka on Tuesday for simultaneous protests led by members of the Kansans for Payday Loan Reform organization. They met in six Kansas cities to launch an effort to reform state law by limiting interest rates and regulating payment schedules set by payday loan and auto title companies. She said Kansas law allows companies to charge rates as high as 391%.
âWe want Kansas to reform its laws to ensure that, first, people have enough time to pay off the loan on affordable payment plans over months, not weeks,â Ricker said. “And limit the amount to no more than 5% of each paycheck.”
Kathleen Marker, CEO of the YWCA of Northeast Kansas, said a coalition of 20 religious and secular organizations will speak out in the 2020 session of the Kansas Legislature on the issue of loans. Thousands of financially vulnerable people across the state can benefit from reasonable limits on loans, she said.
“We are here to launch a campaign for everyday Kansans to take over this state and proclaim a moral economy – a just and just economy,” said Marker.
Coalition members gathered in Topeka in a shopping mall parking lot next to a LoanMax outlet near 29th and Fairlawn. Other coalition members gathered at similar events in Salina, Wichita, Pittsburg, Lawrence and Kansas City, Kan.
An employee of Topeka LoanMax, which is a car securities lending company, said the company would not comment.
Topeka resident Anton Ahrens said the federal government has imposed interest rate restrictions on members of the military. This model can be useful for policy makers at the state level, he said.
âWhy should ordinary citizens not have the same rights? Ahrens said.
Joyce Revely, of Kansans for Payday Loan Reform, said short-term lenders are preying on women, children, veterans and seniors in the community. She said Kansans should be fed up with companies taking advantage of the most vulnerable.
Borrowers who struggle to repay their loans fall behind on basic expenses and end up turning to charities and government programs to help cover these basic costs of living, she said. .
The Kansas bank commissioner’s office said that in 2018, about 685,000 securities or payday loans were made with a value of $ 267 million. In Kansas, a business can legally charge enough interest to turn a $ 300 loan into a $ 750 bond in five months.
âPredatory payday loans and auto title loans, as they exist today, are unfair and abusive,â Ricker said during the brief rally outside LoanMax. “The reforms we are proposing will help borrowers use loans as intended, a temporary bridge and not an inevitable trap.”