LANSING, Mich. -- Critics of a bill being considered by lawmakers that would allow payday lenders to offer longer term, higher dollar loans say the legislation puts the most vulnerable Michiganders at risk.
House Bill 5097 would allow payday lenders in Michigan to make loans of up to $2,500 with no limit on the length of the loan.
Sandra Pearson, president and CEO of Habitat for Humanity of Michigan, says families don't always know what they're getting into when they take out a payday loan.
"Our financial coaches and counselors and educators are more and more interacting with families who are coming to us wanting help," she relates. "And probably about 30% of those coming to us are involved in payday lending loans that they're trapped in right now, and we're working toward helping them get out of this cycle."
Pearson adds that a borrower who took out a $2,500 loan would end up paying more than $7,000 to the lender at the end of a two-year period.
Several states, including Georgia, Colorado and Montana, have either banned payday lending or have strict caps on the annual interest charged.
Many people who walk through the doors of a payday lender are desperate for cash.
De'Angelo Boone works as a community outreach manager for Habitat for Humanity. He says when circumstances led him to take out a payday loan, he felt he had no other choice.
"Well, my experience is I ended up in a situation where I took custody of my younger brother, my younger sister and two other kids in the community," he explains. "I was also robbed by a family member, and I was put into a financial crisis.
"And it just kind of created a cycle, because you go back and you pay it back but then you pay back this high additional amount. And then you're trying to recover from the amount that you're paying back."
Pearson says borrowers who take out these loans often end up defaulting, closing their bank account and even filing for bankruptcy. She says residents should look elsewhere for assistance.
"Instead, reach out to your Habitat for Humanity, reach out to your local credit unions and even your church, take the time to reach out to your own network, your own resources, and people will help you," she urges.
Pearson says 70% of Michigan borrowers take out a new loan the same day they've paid off a previous loan.
House Bill 5097 would allow lenders to make loans to individuals who already have a high-cost loan, and would permit the rollover of short-term payday loans into a longer-term loan.
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Lawmakers in Olympia this session moved to add more protections for consumers against predatory loans.
Washington state lawmakers passed Senate Bill 6025 unanimously in both chambers, closing a loophole companies were using to evade caps on the amount of interest charged on loans.
Sam Leonard, an attorney in Seattle, said tech companies providing financial services such as loans would charter out of state banks, especially in Utah, where lenders can charge unlimited interest rates.
"These fintech lenders a lot of times will charge 150, 200% interest on relatively small dollar loans, $3,000, $5,000 and the like," Leonard explained.
Washington state has a set of protections called the Consumer Loan Act to shield people from predatory loans. Leonard said capping interest rates at the federal level would help people across the country.
However, he emphasized the bill goes a long way to increase protections for Washingtonians.
"Not a lot of states at this time have passed similar legislation," Leonard pointed out. "Washington is out in front of the curve with regard to protecting low-income Washingtonians or other Washingtonians that might enter into these predatory loan products."
Leonard added the issue with predatory loans is they keep people in continuous debt cycles.
"Loan products like these essentially strip low-income individuals' ability to improve their economic situation," Leonard noted.
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While there's snow in the immediate forecast, the spring storm season has arrived in Minnesota and state officials said with complaints related to homeowner insurance claims on the rise, it is important to monitor changes in policies.
The Minnesota Commerce Department said complaints from policyholders, largely stemming from their claims being denied, have more than doubled since 2020.
Julia Dreier, deputy commissioner of insurance for the Minnesota Department of Commerce, said under a changing climate, the nation is seeing plenty of extreme weather events resulting in wind and hail damage, and insurance companies are adjusting to what's happening.
"Insurance costs are going to increase," Dreier pointed out. "We do want to make sure that Minnesotans are prepared."
As some carriers narrow what is covered or require higher deductibles, Dreier urged consumers to carefully review their policy when it is up for renewal, to avoid surprises when they have to file a claim. The department acknowledged changes can slip under the radar when consumers rely on paperless statements sent via email, or with busy schedules preventing them from reading all the fine print in documents they receive.
The department emphasized it is a complicated process in getting complaints resolved, noting some can be partially reversed in favor of the homeowner. Dreier noted they work closely with the industry to make sure a company's actions are within the letter of the law.
"One of our jobs is to make sure that insurance companies aren't doing something unethical when they're submitting their policy forms to us and their rates to us for review," Dreier added.
The department does have a new video on its YouTube channel, which offers more details on how to better prepare yourself ahead of any future claims, including knowing whether your policy offers flood protection and assessing the value of items in your home.
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Wisconsin has announced a big development in trying to establish more digital equity around the state.
Gov. Tony Evers and the Public Service Commission say Wisconsin's blueprint for digital equity has been accepted by the National Telecommunications and Information Administration.
That means the state is eligible for up to $30 million to implement its approach over the next five years.
Martha Cranley - state director for AARP Wisconsin - called it a robust plan, noting that older populations continue to face challenges in being connected to the digital world.
"We know that at least 15% of people 50-plus in Wisconsin are not connected," said Cranley, "either because the wires simply don't come to their house, or they don't have a device, or they don't know how to use it."
Cranley said the lack of connection is especially concerning in rural areas across northern Wisconsin, where aging communities have limited resources.
Stakeholders also note an infusion of new aid is helpful with the federal government's Affordable Connectivity Program - which provides discounts on monthly internet bills for eligible households - in danger of running out of money.
Cranley said the state's plan came together following extensive public outreach, in which her organization helped convey the need for improved internet access for those 50 and older.
"They certainly heard from older people about how important this is to connect to their doctor," said Cranley, "and to connect to government services, and frankly, find employment."
Overall, Evers says the plan's federal approval means more than 410,000 homes and businesses will be better positioned to be connected to new or improved high-speed internet service.
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