Federal Payday Lending Rule a Win for Kentuckians

Federal Payday Lending Rule a Win for Kentuckians

To read through KCEP’s submitted reviews from the guideline, view here.

The customer Financial Protection Bureau (CFPB) circulated its long awaited proposed guideline to reign in several abusive techniques of payday lenders nationwide. In Kentucky, this will influence approximately 200,000 mostly low-income payday lending clients.

More about Economic Safety: Monitoring SNAP in Kentucky

While Kentucky legislation limits yearly interest rates on lending options to no more than 36 %, payday loan providers are exempt, and that can issue short term loans for $15 per $100 lent, for as much as $500, usually for a 2-week term. Borrowers aren't permitted to do have more than 2 loans out at any offered moment in time, but this nevertheless enables a borrower that is single remove 52 loans a 12 months – which, when annualized, leads to a 390 % APR. The company that maintains the Payday Lending database for the Kentucky Department of Financial Institutions in fact, the average borrower pays $591 in interest and fees for an average principal of $341 according to the annual report by Veritec.Read more