SHREVEPORT, LA (KSLA) - Now that lawmakers have shot down efforts to cap annual interest rates for payday loans in Louisiana, supporters for stricter regulations of the storefront lenders are rallying behind another strategy.
They're backing SB 84, a bill by Bogalusa Sen. Ben Nevers that would limit borrowers to 10 payday loans per year. It awaits a hearing in the Senate Finance Committee.
"It's one that does not have to deal with what our banks, our credit unions, and even our pawn shops have to meet," said Mayor Cedric Glover who joined a rally in Shreveport to support the bill.
A faith-based group hosted the rally Wednesday morning outside the State Office Building on Fairfield Avenue calling on committee members Greg Tarver and Sherri Buffington to help make it happen.
"It does target those persons who can least afford to pay these kinds of loans and this outrageous interest," said Aaron Dobynes of Interfaith.
Northern and Central Louisiana Interfaith cites statistics from the Office of Financial Institutions that shows 3,126,278 payday loans originated in Louisiana in 2013 and residents paid $145,665,345 in loan interest and fees. Caddo residents paid $9,488,258 – the third highest in the state.
"Are you going to pay their electric bill," asks Bridget Frith, regional manager for Payday Loans in Bossier City. She says providing a quick loan of about two or three hundred dollars is a service that her industry provides, and she believes people shouldn't be limited to how many loans they can take. Frith also believes regulating the industry would be damaging to it, and therefore damaging to the economy.
In a statement, Interfaith says, "We are not asking that the payday industry be outlawed. Banks and Credit Unions have a cap on the number of loans one person can receive. We do not think it unreasonable that the payday industry should adhere to the same rules."
The organization, which works with sister organizations all over Louisiana, would like the see an even lower cap. "We think the number cap is too high and should be closer to five. However something must be done to address this insidious practice that preys on people when they are desperate and in need and we support this compromise."
Shreveport Mayor Cedric Glover also attended Wednesday's rally in support of the bill.
A cap on the number of payday loans per year wasn't the first choice of organizations that sought tougher restrictions on payday lending. They wanted limits on the fees that could be charged for the short-term, high-interest rate loans.
But the idea has been rejected in House and Senate committees and by the full House. Lawmakers sided with the industry's concern of being shut down.