WASHINGTON — The Maryland & D.C. Credit Union Association is urging the District of Columbia City Council to extend its current usury law to cover payday lenders in Washington, D.C.
"A significant number of District residents are falling into the trap of the payday lending industry, which claims that payday loans are used only for emergencies and occasionally by consumers," MDDCCUA Chairman Wesley Bone and President/CEO Mike Beall wrote in a letter today to the city council. "Neither is true based on the experiences as seen by credit unions. Payday lenders make significant profits only when consumers enter the payday loans cycle and stay within it obtaining back-to-back loans that rack up very high fees and APRs. The goal of every payday lending is to capture a consumer and keep them coming back for more loans when they cannot afford to break the cycle and pay the predatory loan off in full."
The two noted that the Federal Credit Union Act caps credit unions at 18% and the payday lending industry is discarding "the entire regulatory framework of the federal Truth-In-Lending legislation and regulation."
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