[Congressional Record (Bound Edition), Volume 149 (2003), Part 11]
[Extensions of Remarks]
[Page 14347]
[From the U.S. Government Publishing Office, www.gpo.gov]




    ANTI-CONSUMER PRACTICES IN PAYDAY LENDING NEED TO BE CONTROLLED

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                           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 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.

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