LINCOLN, Neb. – Consumer loans that come with super-high interest rates, some say as high as 400 percent, are under fire in the state legislature.
So-called “PayDay” lending operations need widespread reform, according to two Omaha area lawmakers.
State Senators Lou Ann Linehan and Tony Vargas have plenty of changes in mind to keep folks from getting caught in a vicious debt-filled cycle.
Among the changes:
- Consumers would never pay more than 50 percent of the original loan amount.
- Monthly payments could not exceed more than 5 percent of the borrowers monthly income.
- Loans would be capped at $500 and interest rates could not exceed 36 percent.
According to the Women’s Fund of Omaha, those most effected by “Payday Lending” are minorities and the poor.