Cap high interest rates on payday loans
The Des Moines Register (Opinion)December 26, 2009
Sarah Longwell and the Center for Consumer Freedom shouldn't be interfering with the efforts of the Des Moines City Council to reduce the prevalence of predatory and abusive lenders in the city (Dec. 9 letter).
Longwell fails to realize that payday lending is anything but a "valuable financial tool." The idea that payday lending regulation limits consumer freedom seems like a cruel joke that mocks the thousands of Iowans each year whose financial freedom is stripped away when they are ensnared in a payday loan cycle.
Payday lending is usury. Annual percentage rates on payday loans in Iowa can reach as high at 400 percent, and research from the Center for Responsible Lending clearly shows that over 98 percent of all payday loan customers are taking out new loans in just 30 days.
This means that 98 percent of all payday loan borrowers are unable to pay back this "valuable financial tool" in just two weeks' time. The payday lending business model is absolutely dependent on borrowers quickly becoming instant repeat customers.
If payday lenders were honest, they wouldn't require borrowers who are already struggling to payback a loan of any amount in just two weeks.
This is wrong, and it needs to stop.
It is time for our state Legislature to act, and cap interest rates on payday loans.
- Chris Neubert, community organizer, Iowa CCI, Des Moines
Richard Berman has been a regular front man for business and industry in campaigns against consumer safety and environmental groups. Through his public affairs firm, Berman and Company, Berman has fought unions, Mothers Against Drunk Driving, PETA and other watchdog groups in their efforts to raise awareness about obesity, the minimum wage, the dangers of smoking, mad cow disease, drunk driving, and other causes. Berman runs at least 15 industry-funded front groups and projects, such as the Center for Union Facts and holds 16 "positions" in those organizations.
Each year, Berman, using his front groups to spread misinformation, spends millions of dollars distracting the public with misleading ads.
As a result of his largesse, in 2006, Richard Berman used $2,000,000 in cash to buy this $3.3 million house.
