Payday loans strip wealth from communities of color
Source: Center for Responsible Lending

As Arizona citizens consider a measure the payday lending industry, based out of state, has paid to put on the ballot this November and spent millions marketing, they should know the facts about Proposition 200 and payday lending, say national experts and state advocates. A new report from the Center for Responsible Lending sheds some light on the measure and its expected impact.

First, Prop 200 offers no reform of the predatory practice of payday lending. Second, it would, in fact, make 400 percent interest legal in the state indefinitely, canceling the real reform scheduled for 2010. And third, payday loans by their nature target people who need cash before their next paycheck and trap them in a cycle of long-term debt. This means that members of communities with historically low levels of savings and wealth are vulnerable to being caught in this trap, and those communities risk further shrinking of resources as a result of the predatory lenders clustering in their neighborhoods.

+ Full Report (PDF; 506 KB)

This entry was posted on Monday, October 6th, 2008 at 6:24 pm and is filed under Business and economics, Consumer issues, Ethnic, Race, Social and cultural issues. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.