Payday loans have been in the headlines recently with regards to some states placing restrictions on payday loans, if not placing outright bans on the cash advance payday loan industry. Now the battle over these short-term personal loans has shifted to the front and center of the Kansas Statehouse. An epic battle between supporters of payday advances and opponents is shaping up in the Kansas state legislature.
On one corner is Kansas state Representative Clark Shultz wants to end payday lending in the state and on the other corner is state representative Melody McCray-Miller opposing Shultz’s moves. Rep. Shultz believes payday lenders exploit vulnerable consumers and wants to see tough restrictions placed on Kansas payday loans.
There are a growing number of Kansan legislators who share Shultz’s views and want to see tougher restrictions on the practices of the payday loan industry. The lawmakers want to curb, as they see it, as an over-reliance by many consumers on these short-term instruments.
The last few days has seen a heated debate on the House floor about the fast cash loans. The loan opponents would like to impose strict interest rates caps of thirty-six percent annualized interest on every loan or at minimum some restrictions on the type of loan services offered to consumers.
However, supporters of payday cash advance loans disagree with Shultz’s approach to paint the entire payday lending industry with the same brush. Rep. McCray-Miller opposes Shultz’s reform efforts. She believes that the actions of a few financially irresponsible payday borrowers shouldn’t hinder responsible loan borrowers from accessing paydays.
McCray-Miller proposes that consumers who have limited credit options have the choice of accessing payday loans, when all other avenues have been exhausted. The state legislator references recent research showing that states which have stopped cash advance loans, consumers have had no choice but to turn to more expensive credit choices. The alternative credit options such as, bad credit cards and bank overdraft fees according to experts end up costing more money than payday loans in the long run.
Nevertheless, Shultz and some of his fellow lawmakers are not convinced by McCray-Miller’s arguments. They still are firm in their belief that the Kansas cash advance industry needs to be curbed for the consumer interest. Ultimately, it will be consumers who will decide what is in their interest.