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MINNEAPOLIS – The push to rein in payday lending continues in Minnesota.
A reform group – Minnesotans for Fair Lending – hosts what it calls a free educational event today in Minneapolis to help people avoid falling into the debt trap.
Brian Rusche, executive director of the Joint Religious Legislative Coalition, is among the speakers. He says payday lending can strip low-income workers of their earnings by charging high interest rates, sometimes in the triple digits.
"It's not well-regulated,” he states. “It was illegal – up until 2006, I believe – and then we let the industry back in, and it's just not been good for people at all."
Ahead of the upcoming legislative session, Minnesotans for Fair Lending is urging Minnesota lawmakers to limit the number of payday loans a borrower can have.
Critics of tighter regulations argue that these limits could put payday lenders out of business, and that short-term loans serve a legitimate role for people who use them responsibly.
Members of Minnesotans for Fair Lending, including religious leaders, supported bills two years ago that would have capped both the number of loans and interest rates, but those moves were blocked.
Rusche is now urging people to take up the issue again - this time on Super Tuesday, March 1, when Minnesota will hold its presidential caucuses.
"We're hoping that people will take resolutions to their party caucuses, whether they're Republicans or Democrats, doesn't matter,” he states. “We want them to take resolutions about our need to more tightly regulate this predatory lending."
At today's event at Holy Trinity Lutheran Church, Diane Standaert, director of state policy at the Center for Responsible Lending, is also a presenter. She says the average payday loan customer takes out almost 10 of these loans a year, which can lead to compounding debt.
"Stopping that debt trap is incredibly important, in terms of protecting the income and assets of low-income Minnesotans, and allowing them to create pathways to build assets for the future," she stresses.
