Group seeks standards for payday loan operations

COEUR d'ALENE — An advocacy group used its annual day of action Monday to promote enacting national standards for payday loan operations and ending uncapped loans.

Idaho Community Action Network is protesting what it calls a lack of action by the Consumer Financial Protection Bureau. According to a news release from ICAN, the federal agency tasked with enforcing rules in consumer finance markets has not released a set of rules it began drafting in 2014 to "stop the debt trap and end the worst abuses of payday and car title lending."

"The process that began in 2014 looked like it was headed in the right direction, especially in March of 2015, when the agency released draft language that addresses the debt trap," the release states. "However, two years later we have yet to see these rules. Between the date the draft proposal was released and today, payday lenders have stripped more than $7 billion from our communities in the form of interest payments and fees on loans that are being advertised for two-week emergencies but designed to keep the borrower in debt for months on end."

Miranda Davis, an ICAN member, shared her story during a rally in front of a payday loan outlet in Boise on Monday. In the release, Davis said the rule changes "can't come soon enough."

"I work hard as a single mom and the last thing I needed when I borrowed money was to get trapped in a cycle of debt that was nearly impossible to get out of," Davis said. "To get out of the trap, my wages were garnished and it hurt my family more than if I had just let my power be shut off."

Fellow ICAN member Terri Sterling told The Press Monday a "small but mighty" group of about two dozen supporters went to the Boise business for the rally. She added her group has made the issue a priority for three years now and has been advocating for local ordinances, Consumer Financial Protection Bureau action and a 36 percent rate cap on payday loans.

The current average annual percentage rate for a payday loan in Idaho is 582 percent, she added.

"I just want everybody to have access to fair lending and I don't think these payday lenders can do that," Sterling said. "People with poor credit and low incomes are trapped and have no other choice but to take out the payday loan."

Sterling said in Idaho, $64 million a year that could go into local economies is lost because individuals are stuck paying payday lenders at high interest rates. Local ordinances can help by reducing the number of payday lenders in cities throughout Idaho and not allowing new businesses to come in without first being vetted by the community.

"We're just really pushing cities to limit the number of them because there's just too many," Sterling said. "And as other states around us regulate what the industry does, the industry is encouraging people to start more of these businesses in Idaho because we have uncapped rates."

Throughout the year Sterling and ICAN plan on working with cities, including Coeur d'Alene, to advocate for the creation of ordinances. They will also continue to work with a national group to continue pushing for national standards for payday lending.