Legislation to rein in payday lenders, who trap some of Kentucky’s most vulnerable people in cycles of debt, died last week in the state Senate, but federal regulators are now stepping up to the plate.
Sen. Alice Forgy Kerr, a Lexington Republican, sponsored a bill that would limit payday loan interest rates, which can approach 400 percent, to 36 percent, the limit the U.S. Department of Defense sets for loans to military personnel.
The bill was supported by consumer advocates, as well as by both liberal and conservative church groups on moral grounds. But it died in the State and Local Government Committee. Wonder if that had anything to do with the payday lending industry’s campaign contributions to some legislators?
Last Thursday, President Barack Obama and the U.S. Consumer Financial Protection Bureau announced plans for a federal crackdown on payday lenders.
U.S. Rep. Andy Barr, a Lexington Republican who has received several hundred thousand dollars in contributions from financial services companies, issued a press release March 19 about proposed legislation to curb the CFPB’s “reckless regulatory overreaches.”
Looks more like an attempt to muzzle a watchdog that protects citizens from Barr’s corporate benefactors.