PA House OKs Payday Lending Bill that Would Trap Borrowers in Long-term Cycle of Debt
HARRISBURG, PA (June 7, 2012) — Keystone Research Center labor economist Mark Price issued the following statement on behalf of the Coalition to Stop Payday Loans in Pennsylvania on state House passage of HB 2191. This bill would legalize payday loans at annual interest rates of more than 300 percent.
"This bill legalizes a form of predatory lending that traps many borrowers in a long-term cycle of debt. In states with similar laws, the typical borrower is indebted for more than 200 days a year, while payday lenders derive 60 percent of their revenue from borrowers with 12 or more loans annually.
"The bill narrowly passed the House despite the objections of a broad coalition that includes the Council of Chapters of the Military Officers Association, Habitat for Humanity, AARP, credit counseling agencies, women's advocacy groups, and the AFL-CIO the Pennsylvania.
"We urge the Pennsylvania Senate to reject this bill and protect Pennsylvania's families from a product designed to undermine household finances and increase bankruptcies in working and middle class rural and urban communities."