On Monday, Jan. 16 2012, during a protest on EZ Money Payday Loans at EZCORP 2911 W. State Street in Boise, members of the Idaho Community Action Network released a report titled “Predatory Lenders Trap Idahoan’s in a Cycle of Debt.”
According to the report, Idaho families are: “increasingly struggling to make ends meet. Affordable small scale loans, which could tide families over, are hard or impossible to come by. Finding no alternative, families are turning to “payday” and title loans that come with high interest rates and often wind up trapping them in a cycle of debt.”
ICAN member Diana Corcorran from Downey, Idaho shared her story in the report:
“I took out payday loans to pay our bills and for my son’s medical care. Right now I owe money on two payday loans and have taken out others in the past. For a 1,000 dollar loan we pay 120 dollars each month for a year, which has proven to be a significant drain on our finances.”
Payday and title loans are big business for corporations representing the country’s wealthiest one percent. This includes many of the same Wall Street banks, such as Wells Fargo and Bank of America, which were bailed out after crashing our economy in 2008. These large financial institutions receive money from the Federal Reserve at a rate currently below a tenth of a percent , loan money out to payday lenders at over ten times that to a rate of about three percent , who then loan money to consumers at a rate several hundred times larger at over 400 percent. Meanwhile, payday lending corporations and their CEO’s pour hundreds of thousands of dollars into political contributions. In the period between 1996 and 2006, the payday lending industry gave $93,400 to state-level candidates in Idaho. Virtually all of this money ($90,900; 97 percent) came from outside of the state.
The report identifies specific policies that lawmakers can pursue in the 2012 Legislative session to show that they stand with Idahoans—and not with the payday and titled lenders backed by Wall Street Lawmakers.