Coalition wants voters to set payday loan rates


Special Correspondent

St. Louis – “There are over twice as many payday loan stores in Missouri as there are McDonald’s and Starbucks combined,” Robin Acree, executive director of GRO-Grassroots Organizing, said as she talked with this reporter outside of the Missouri State Capital last year.

 [frame src=”” width=”250″ height=”150″ align=”left” style=”2″ linkstyle=”none”]“There is one on damn near every street corner,” she continued.

“And the republican controlled House and Senate refuse to do anything to reign in these parasites – parasites that prey on Missouri’s most vulnerable.”

While Acree may be exaggerating a little about the number of payday loan stores in Missouri, she isn’t that far off.

According to the Missouri Division of Finance, in 2010 there were an estimated 1,040 payday loan stores in the Show-Me State.

Acree’s organization, which is based in Mexico, Missouri, was founded twelve years ago by a single mom on welfare tired of being ignored by Missouri politics and politicians. It is the only progressive, direct-action, grassroots organization based in rural Missouri.


Acree isn’t alone in her low opinion of payday loan companies.

Darryl Howard, has filed for bankruptcy due to his payday loan debt. According to him, “Enough is enough!”

Howard, works full-time at a north St. Louis mental health habilitation center where he feeds and bathes patients, checks their vitals and blood pressure, and performs other duties. Twenty-five percent of his $10 an-hour wages are garnished by payday loan companies.

He is stuck in a cycle of debt, with over $15,000 owed to payday loan companies like Quick Cash, St. Louis Title Loans and Missouri Title Loans.

Howard, understandably, tries to get all the overtime he can. “I’m tired and exhausted, but the overtime is worth it,” he said.

Unfortunately, Howard’s situation isn’t that uncommon. Like many low-income workers, as his bills mounted, he borrowed money from one payday loan store to pay the bills, and then borrowed from another payday loan store to pay-off the other.

Additionally, he started receiving harassing phone-calls, and found out the hard way that payday loan companies “will do anything to hunt you down,” including “show up at work.”

“They don’t care about the customer. They care about the money,” Howard concluded. “They are gonna make their money, and make sure they make their profits.”


While thousands of Missourians are experiencing Darryl Howard’s situation, thousands more share Robin Acree’s sentiments.

A statewide coalition, Missourians’ For Responsible Lending, has decided to go on the offensive and bypass the Republican controlled legislature, taking the issue directly to Missouri voters.

The coalition recently started collecting ballot initiative signatures to cap short-term payday loan interest rates at 36 percent. That’s a rate common in other states that have enacted laws to cap interest on payday loans.

It’s also the federal rate for payday loans to military service men and women. That law was enacted by former Republican U.S. Senator Jim Talent of Missouri after the Pentagon discovered widespread exploitation of soldiers and sailors by payday loan companies operating near military bases.

Current interest rates in Missouri are capped at 1,950 percent, while the average annual interest rate is 444 percent.

The coalition hopes to collect enough signatures between now and May to put the initiative on the November ballot, which would also likely help turn out low-income, working class voters for President Obama and other Democratic candidates this fall.

According to recent poll data Missouri voters overwhelmingly support capping payday loan interest rates, which is probably why pro-industry front groups have begun funneling money into opposition groups.


One group, Missourians for Equal Credit Opportunity, has raised $850,000 from the right wing Kansas City based Missourians for Responsible Government.

Another group, Stand Up Missouri, has benefited from around $200,000 in contributions from companies in Texas, Mississippi, South Carolina and Oklahoma. Both groups cynically claim to be worried about customers like Darryl Howard.

Missourians for Responsible Lending, by contrast, is working on a shoestring budget and volunteer time. The coalition’s support comes primarily from unions, community groups, retirees’ organizations and people of faith.

Seventeen states currently cap payday loan interest rates at 36 percent, the Federal limit for active-duty service men and women.

Nationally, payday loan companies – and other “parasite” industries – are feeling the heat also, as the U.S. Consumer Financial Protection Bureau, which is designed to safeguard borrowers from unscrupulous lenders, recently became fully functional with President Obama’s recess appointment of Richard Cordray as its new director. For the first time in U.S. history, nonbank entities – like payday loan companies – will be subject to oversight, ensuring consumer protections.

In fact, the day after Cordray’s appointment, the Bureau launched its nonbank supervision program, indicating payday lending as a top priority.

Currently, there are an estimated 22,300 payday loan stores nationwide that make $30 billion in loans annually.

If Missourians for Responsible Lending get their way, Missouri will join a growing national chorus of states taking action against payday loan companies and their attempts to suck the life out of our communities.

Perhaps just as importantly though, payday loan customers like Darryl Howard will have a better chance of getting out of debt and staying out of debt permanently – something we can all support in these tough economic times.

According to Howard, “I’m so done with payday loans. I just want this to be over.”


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