LINCOLN — A petition drive to cap payday loan rates at 36% annual interest in Nebraska kicked off Tuesday in Lincoln.
Leaders with Nebraskans for Responsible Lending said they are trying to put a measure before voters in the November 2020 general election. They plan to begin gathering signatures soon.
“It’s time that something was done,” said former State Sen. Al Davis of Hyannis. “The Legislature has had ample opportunity to fix this problem and they haven’t done so, so now we’re going to go out and secure signatures and get this in place.”
The Rev. Damian Zuerlein of Omaha’s St. Frances Cabrini Catholic Church said the church sees many people who have been victimized by payday lenders. They come seeking help to pay their rent or buy food because all of their money is going to paying off the loans.
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To get the measure on the November 2020 ballot, the group, formerly known as Fair Lending for Nebraskans, will have to collect valid petition signatures from 7% of registered voters. Aubrey Mancuso of Voices for Children in Nebraska said the group is working on finding financial backing for the effort.
Nebraska law now allows payday lenders to charge fees that amount to more than 400% annual interest on loans. Industry representatives say the proposed caps could kill their businesses and harm people who cannot get credit elsewhere.
But 16 states plus the District of Columbia have already enacted 36% interest caps on payday lending. Congress passed a 36% cap for active-duty military personnel after the Defense Department reported that payday lending was negatively impacting military readiness and the morale of troops.
Nebraskans for Responsible Lending coalition members include AARP Nebraska, the ACLU of Nebraska, Community Action of Nebraska, Habitat for Humanity of Omaha, Heartland Workers Center, the National Association of Social Workers-Nebraska Chapter, Nebraska Appleseed, Nebraska Children’s Home Society, Omaha Together One Community, Voices for Children in Nebraska, the Women’s Fund of Omaha, Youth Emergency Services and YWCA Lincoln.