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The latest on the Key Bridge collapse, New York puts forth legislation to get clean energy projects on the grid and Wisconsin and other states join a federal summer food program to help feed kids across the country.

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Republicans float conspiracy theories on the collapse of Baltimore's Key Bridge, South Carolina's congressional elections will use a map ruled unconstitutional, and the Senate schedules an impeachment trial for Homeland Secretary Mayorkas.

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Historic wildfires could create housing and health issues for rural Texans, a Kentucky program helps prison parolees start a new life, and descendants of Nicodemus, Kansas celebrate the Black settlers who journeyed across the 1870s plains seeking self-governance.

Montana Initiative Takes on the Payday Loan Industry

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Wednesday, February 24, 2010   

HELENA, Mont. - The future of high-interest payday and title loans could be on the ballot in Montana. A coalition calling itself "400 Percent is Too High" has proposed an initiative that would cap the annual interest rates of those loan types at 36 percent. Current borrowers face interest rates and fees of up to 400 percent.

Tom Jacobson is executive director of Rural Dynamics, a nonprofit consumer education organization backing the initiative. As he sees it, too many families get trapped in a neverending debt cycle, especially in this fragile economy. He's found it's not unusual for a borrower to pay $800 for what began as a $300 short-term loan.

"We see people come in all the time using one payday lender to pay off the other one, to pay off the other one. The fees increase and they have to borrow more, and they can't get out of the circle."

The payday and title loan industry has faced similar scrutiny in several states. It aggressively opposes caps on interest rates, and argues the loans are necessary for some people seeking short-term cash. Jacobson says there's no doubt families struggling to make ends meet need access to small loans, which is why pilot programs at credit unions could be expanded. Such loans are offered at 18 percent and come with other benefits.

"And we can actually start getting them the financial counseling, the financial education, and start building them towards economic independence rather than keeping them trapped."

Montana lawmakers have rejected similar proposals, and payday loan companies say a capped rate would send them out of the state, to do business elsewhere. Military families are already protected by a 36 percent rate cap set by Congress because of concerns that the loans were a risk to troop readiness.

The "400% Interest is Too High - Cap the Rate" organization has garnered support from groups that include AARP Montana, the Center for Responsible Lending, homeWORD, the Montana Catholic Council and Montana Community Foundation; Montana Women Vote, NeighborWorks Montana, SEIU Healthcare 775 NW, and the Women's Foundation of Montana.




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