To restrict the amount of payday loan interest, Wichita legislator will introduce bill

December 13, 2006

When state lawmakers in North Carolina capped the amount of interest payday loan companies could charge for short-term loans, the industry went bust in that state.

A Kansas legislator hopes a measure she plans to introduce in the upcoming legislative session would make "predatory lending" less lucrative in Kansas.

Wichita Democrat Melody McCray-Miller said the bill could include an interest rate cap similar to the one that drove the payday loan industry out of North Carolina.

But some customers take out a payday loan with one company to pay off a similar loan they've taken out from another. A nonprofit credit counseling group in Wichita and Salina say they have heard of customers with as many as 18 loans.

The payday loan industry argues that many consumers do not have access to short-term loans anywhere else, and that such loans provide a service to those who need fast cash.

Resources: http://www.kshb.com