How predatory payday lenders are getting customers hooked
“If what conspired to silence poor people had hands, the thumbs would be the shame.”
— Julia K Dinsmore
“I was in my late 20s and had a few jobs and wasn’t very secure financially,” Cranston said Kieran Wilder on a phone call UpriseRI. “I honestly had never heard of these payday loans, but a buddy of mine mentioned he took out one.
“I started out with a $300 loan advance America in Kranston. They take out $300 and pay them $330. I couldn’t afford to pay it back in the future, so I took out another loan to pay off the first one, every two weeks altogether for about six months.”
That has “slightly” impacted more than $360 in interest over the course of the loan series, Kieran told UpriseRI.
“They ask you for a check when you take out the loan, the check to use at the bank in case you can’t make the payment,” said Kieran, who never had an overdraft problem because he always renegotiated it Loan.
“I was always paying off the loan, I just had to take out a new one so I wouldn’t run out of money,” said Kieran, who got out of the payday loan cycle with the help of his father, who eventually lent him the money to get by.
After Kieran repaid the loan, he hoped to put the experience behind him, but then, as of the summer of 2021, nearly a year after paying off the payday loan debt, Kieran was receiving calls from both his private cell and from the company phone number and his work phone.
“The first thing you think when you get the call is, ‘Oh shit! Did I forget to pay it back?'” Kieran said. “But they basically just called to say, ‘Hey, do you need money?'” Kieran took two of the calls on that phone and forwarded them to UpriseRI. The calls were edited to remove the store’s preturn phone number.
It took Kieran time to get over his reluctance to tell his story. “Obviously, I didn’t want to come off as a broke kid,” Kieran said. “I was embarrassed that I was even in this credit cycle. I was dating at the time and didn’t let her see the paperwork. But enough time has passed that I’m less embarrassed.”
“The ladies who work the counter at the payday loan company were super nice,” Kieran said. “I have nothing against her. I am sure that they are also low-wage earners.”
UpriseRI contacted us Margaux Morisseauone of the leaders of Payday Credit Reform Coalitionwhich plans to step up efforts against predatory payday loan companies at the general assembly at this session.
“Payday loan companies take millions of dollars out of Rhode Island residents every year,” Morissau said. “These predatory loans have been restricted in many states and now it is time for Rhode Island to end this usury practice as well. A 36% APR cap is the best solution. Voters overwhelmingly support this reform and you can bet it will be a big issue this election year.”
Earlier efforts to curb penalty rates imposed by Rhode Island payday lenders have been stymied by the former House Speaker Nicholas Mattiello who had a close relationship with the payday loan lobbyist William Murphy, who is himself a former Speaker of the House of Representatives. Murphy is paid $30,000 a year to campaign for Advance America.