For months now, our country has been mired in a financial crisis. Millions of Americans are stuck in massive debt, unable to make ends meet. Increased defaults on this higher level of debt are contributing to a huge strain on our economy.
One of the most effective ways we can ease this economic crisis is a crackown on payday loan sharks across the country. This would include a national cap on interest rates and tough new restrictions on loans that are sold on the internet.
As Speaker of the Oregon House, I fought the lobbyists for the predatory lending industry by passing a 36% interest rate cap on consumer loans regulated in Oregon. We also passed a new law placing strict limits on check cashing fees. The coalition we built brought together legislators from all over Oregon who pushed back against these special interests and demand better for our state.
These new laws have helped pressure the predatory payday loan company Check Into Cash to close their Oregon outlets. CEO W. Allan Jones complained:
We tried to work within the constraints of the new law, but lost money each and every month we tried to operate there under the new rules... We have proven that it cannot be done.
As we warned the legislators in Oregon, payday lending cannot be offerd under a 36% rate cap.
If they really can't make a business work charging 36% interest, then we're happy to see them go.
Now that so many American families are stuck in the housing crisis, more are forced to turn to these predatory lenders for short-term loans with sky-high inntestrates, just to make ends met. Costing $4.2 billion annually, 90% of these loans are made to borrowers who make five or more of these loans per year.
As a U.S. Senator, I'll continue to take on the predatory lenders and crack down on payday loan sharks and credit card scams.
I propose to:
*Cap payday loans at a national rate of 36%
*Restrict payday loans made on the internet under a national standard
*Require the Federal Trade Commission to crack down on deceptive practices.
Republican Senator Gordon Smith has sided with this industry, voting against protecting families from these lenders. In 2001, Smith voted against a proposal that would have invalidated claims by predatory lenders in bankruptcy court if the lender charged more than 100% interest.
Enough is enough. It's time for leaders in Washington DC. to stand up to this industry. We need to crack down on payday loan sharks and protect hardworkin familes who are trying to make it. That's exactly what I'll do in the U.S Senate.
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