“Protect everyone, whether you are in the military or not. No one should be subjected to these kinds of outrageous fees. “
Bridge Magazine contacted Financial Services Committee Chair Diana Farrington, R-Utica, and an aide told her Farrington was planning to schedule another hearing. Asked by the aide to comment on the merits of the bill, Farrington did not respond.
In addition to the campaign contributions reported by the Michigan Campaign Finance Network dating from 2016 from financial interests like the Michigan Banking Association – which gave Farrington $ 12,250 – and the Michigan Credit Union League – which gave $ 10,000 – Farrington received 1,000 $ in 2017 from Axcess Financial Services PAC, based in Cincinnati, according to state financial records. Axcess Financial is the parent company of Check ‘n Go.
The Center for Responsible Lending also found that payday loans were more prevalent among minorities and the poorest in Michigan. communities. Census tracts with more than 25% African American and Latin American populations had 7.6 stores per 100,000 population, well above the state average of 5.6 stores per 100,000 population. Areas in which household income was less than 80% of Michigan’s median household income had 9.1 stores per 100,000 population.
“It’s the same in Detroit,” said Ruth Johnson, director of public policy for Community Development Advocates of Detroit, a nonprofit neighborhood improvement organization. “This is the low income household, the generational wealthless household – if something happens your working hours are reduced, an unforeseen expense, this is when people start to think about payday loans . “
Detroit – where about 80% of residents are black – had more than two dozen payday loan stores in 2017, according to the Center for Responding Lending.
Johnson speculated that some neighborhoods in Detroit might be more vulnerable to payday loans due to the demise of local bank branches, as well as minorities may face discrimination in lending from the banking sector.
“This (chance of getting a loan) can be about the form of your income, as well as the color of your skin,” she said.
In rural southwestern Michigan, the Center for Responsible Lending report identified eight convenience stores in or near the small town of Niles. With an individual poverty rate of 30%, double the state average, and a household income of less than $ 32,000, Niles has a concentration of just over 17 stores per 10,000 households, a- he concluded.
That’s 14 times the per capita number of payday loan stores in Detroit and six times that of Grand Rapids, according to the report.
South of Grand Rapids, rural Barry County had three payday lenders as of June 2017. That represented a loss of more than $ 500,000 in debt charges in 2016, according to the Center for Responsible Lending.
Lani Forbes, executive director of Barry County United Way, cited the case of a local family who turned to payday loans amid a financial crisis a few years ago. In this family of five, the husband had a job with a local manufacturer, but the wife fell ill and could no longer work as a home health worker. Unpaid invoices are piling up.
Forbes said they took out one payday loan and then another. What started out as a loan of $ 325 ended in debt exceeding $ 1,200.
“Now they’re caught in the cycle. They have to pay extra fees and now they have no more money for food, ”Forbes said.
Barry County United Way put the family in touch with local pantries and arranged to repay around $ 650 of the loan while the family paid the rest.
“You end up getting involved when the person is totally in crisis. They are in the middle and they cannot get out. They keep spinning.
To publicize the risks of these loans, Forbes said it often asks community members to guess the interest rates charged by payday lenders.
“Nobody is guessed right,” she said.
“They generally believe that payday lenders charge around 30 or 40 percent. They can’t believe it’s over 300 percent.
