Legislature and Governor Encouraged to Cap Payday Loan Interest Rates

The Iowa Catholic Conference strongly urges the legislature to limit the interest rate on payday loans to 36 percent. The Conference calls upon legislative leadership and the Governor to make this a priority issue during the upcoming session.

The stated purpose of payday loans is to offer a solution to families who face a short-term crisis. But only one percent of these loans are made to one-time borrowers. On the average, Iowans who take out one payday loan end up with 12 loans. This creates an economic dependency and high long-term debt for consumers. Interest rates can approach or exceed 400 percent.

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