Fair lending organization praises Moorhead’s crackdown on payday loans
The group, mainly sponsored by the Evangelical Lutheran Church of America, met with city council member Heidi Durand, who is stepping down this week, as well as Mayor Johnathan Judd and the newly elected state representative. Heather Keeler to praise the city’s efforts. Moorhead has significantly lowered the interest rate on payday loans from what Durand said on average from about 250% to 33% for the two Moorhead lenders.
“Moorhead is a model of what can be done,” said Durand. “We’ll take it on the road.”
She said several other cities in Minnesota have been in touch to learn more about the city’s program, the first of its kind in the state.
In addition to limiting the interest rate, the city’s program restricts fees, limits the number of loans to two under $ 1,000 per year, requires repayment within 60 days, and also asks for detailed details of all. fees as well as annual reports from lenders to the city. .
The program was adopted by city council last fall and caused the city’s two lenders – the Greenbacks at 819 30th Ave. S. and Peoples Small Loan Co. at 1208, avenue du Center. – close shop.
A call to Greenbacks, which says on its website that its hours are unknown but still has a phone number, was not returned on Wednesday. A sign for the company can always be found outside the office building.
In a public hearing on the plan before its adoption, Chris Laid and his brother, Nick, of Greenbacks Inc. were the only residents to object. They owned the business with their father, Vel.
Nick Laid wrote that if the law passed it would likely bankrupt them and lead people to Fargo where interest rates are higher.
“Many people who use short-term consumer loans already have limited access to credit due to poor credit, lack of credit, lack of collateral or lack of community support structures such as friends or family, ”added Chris Laid.
Durand, who has been researching and leading the matter for years, said lenders demand payment due within two weeks, or fees go up immediately if the loan can’t be repaid.
Many credit card companies are surviving on interest rates well below 33%, she said.
She said Moorhead’s program is similar to the North Dakota state program, while Minnesota’s regulations are not as restrictive as the city’s.
Minnesotans for Fair Lending is in the process of creating a website and has a Facebook page where he calls payday loans “predators” that put borrowers in a debt trap with triple-digit interest rates.
Durand has repeatedly greeted the Exodus Lending non-profit organization in Minnesota, which has a 99% success rate in getting borrowers out of their payday loan debts.