This action might not be possible to undo. Are you sure you want to continue?
Ellinger Hosts Payday Loan Reform Hearing Community attends town hall to find out more on reform
University City Over 70 people showed up at the town hall meeting held at Centennial Commons last night organized by Missouri State Representative Rory Ellinger (D-72 University City) and State Representative Mary Wynne Still (D-25 Columbia) to discuss Payday Loan abuses in Missouri and to discuss Rep. Still s bill in the Missouri House that will help tackle those abuses. Figures from the Missouri Division of Finance say that the Average Percentage Rate, or APR of payday lenders in Missouri is on average 444%, and that that the maximum allowable rate in Missouri is 1,950%, the highest in the nation. Surrounding states do not allow for renewals, but Missouri permits loan renewals up to six times. There are over 1066 lenders in the state, with four operating within University City limits. The Department of Community Development of University City provided a map to attendees, which identify the short-term loan establishments in the city. They include ACE Cash Express at 8609 and 7956 Olive Boulevard, Missouri Title Loans at 6985 Olive Blvd., and Advance America, Cash Advance in the University City Square shopping development near Schnucks at 6902 Olive Blvd. Rep. Still noted that payday loans are unsecured loans. Because people can renew their loans in Missouri, some use renewals to pay back the original loan. Still also said that the average loan amount in Missouri is $300. This is how they end up in this cycle of debt. In addition, over 90 nursing homes have licenses to operate as payday lenders, where they can deduct loans, interest, and fees from employee paychecks. Then-Governor Matt Blunt in 2006 stated that nursing homes could no longer engage in lending to employees. Loans were never available to residents of the homes, says the St. Louis chapter of the Better Business Bureau in their report of the payday loan industry in Missouri. Rep. Still has written legislation that will cap interest rates on payday loans in Missouri to 36%. House Bill 132, which is awaiting committee assignment, is modeled after former US Senator Jim Talent s (RMO), which was designed to regulate payday lenders, who commonly target military families. Rep. Ellinger is among 39 co-sponsors of the bill. Payday loans are small loans up to 500 dollars, with a very high interest rate. They have a short payback period, usually 2 weeks. Missouri has some of the weakest laws in the country, Still said in her opening remarks. The Federal Deposit Insurance Corporation (or FDIC) recommends an APR of 36% on payday loans Still added.
Darryl Luster of the St. Louis Community Credit Union spoke to discuss his experienced dealing with payday lenders. He also offered information on what the credit union has in place as an alternative to payday loan lenders. Luster worked two jobs at one point, working for the credit union, and working at DJ, all with outstanding payday loans. Luster said that St. Louis Community Credit Union offers an alternative to payday loans called a Payday Saver Loan, with an interest rate of 25%, a repayment term of 12 months, and application fee. They compare it to a traditional payday loan with up to 400%, a repayment term of 2 to 4 weeks, and application fee that is 15% of the loan. Reps. Ellinger and Still are encouraging feedback on House Bill 132, and can be contacted through their respective offices. Additional information can be obtained at the Missouri House Of Representatives Website at house.mo.gov. You can track House Bill 132 here.