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MDDCCUA Urges D.C. City Council to Extend 24% APR Cap to Payday Lenders

The Maryland & D.C. Credit Union Association wrote a letter to the District of Columbia City Council last week encouraging the council to extend its current 24% usury cap to cover payday lenders in Washington, D.C.

By Sarah Snell Cooke | Updated on September 11, 2007

WASHINGTON — The Maryland & D.C. Credit Union Association wrote a letter to the District of Columbia City Council last week encouraging the council to extend its current 24% usury cap 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 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 loan cycle and stay within it obtaining back-to-back loans that rack up very high fees and APRs. The goal of every payday lender 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.”

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