IPL is working with leaders of Omaha Together One Community (OTOC), the Women’s Fund, Nebraska Appleseed, Voices for Children and others to educate members of the public and the Unicameral about the impact that Pay Day Lending has on working families.
Pay Day Lenders are currently allowed to charge interest and fees reaching 461% APR in Nebraska, one of the highest in the country. For instance, if you went to a Pay Day Lender to borrow $300 to fix your car or purchase medicine, it would cost you $530 in interest and fees to borrow that $300 for just 5 months.
Some Nebraskans have paid as much as $10,000 in fees for a $500 loan which they were not able to pay back over several years. Borrowers must pay back all of the principal, interest and fees in two weeks or renew the loan and pay only the interest–no partial payments of principal are allowed. This is a trap for desperate families who have no other options.
IPL helped OTOC and community leaders learn about LB 194 sponsored by Senators Vargas and Linehan that would have reduced the allowable fees so that borrows could actually pay of the loan instead of becoming caught in an endless debt trap. LB 194 is currently caught in the Banking Committee and will not receive a vote this year at the Unicameral. IPL and our partners will continue to educate around this issue.