[Congressional Record Volume 149, Number 84 (Tuesday, June 10, 2003)]
[Extensions of Remarks]
[Pages E1193-E1194]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    ANTI-CONSUMER PRACTICES IN PAYDAY LENDING NEED TO BE CONTROLLED

                                 ______
                                 

                           HON. BOBBY L. RUSH

                              of illinois

                    in the house of representatives

                         Tuesday, June 10, 2003

  Mr. RUSH. Mr. Speaker, I rise today to bring attention to some anti-
consumer practices in the payday lending industry that need to be 
controlled. The payday lending industry throws consumers into a 
perpetual state of debt. They prey on the most vulnerable customers.
  During turbulent economic times like these, many Americans continue 
to look for inventive ways to meet their financial obligations. Payday 
loan companies provide short-term loans

[[Page E1194]]

with high interest rates to consumers in dire need of cash. After 
supplying verification of employment and proof of an active checking 
account, consumers write a post-dated check and walk out of the payday 
loan establishment with cash in hand. Consumers often prefer these 
loans because the credit history requirement imposed by traditional 
banks is waived. Unfortunately, the consumers who most need these quick 
cash loans are usually those least able to repay the loans. The 
consumer is then subject to exceptionally high interest rates, which 
range from 261 percent to 913 percent annually.
  This is why I am introducing the Payday Borrower Protection Act of 
2003. The Payday Borrower Protection Act of 2003 would provide 
consumers who borrow from payday lenders much greater protection 
against high interest rates and exorbitant fees. My bill regulates and 
imposes some rational criteria on these loans, specifically addressing 
the exorbitant interest rates. This legislation caps annual interest 
rates at 36 percent and prohibits any payday lender from refinancing or 
rolling over loans. The bill also sets minimum national standards for 
state payday loan laws.
  It is my hope that this legislation will ensure that fair borrowing 
practices are offered to consumers. My bill will ensure the industry 
can still stay afloat. At the same time, customers do not overextend 
themselves financially.

                          ____________________