EDITOR: We know there are a lot of important issues on the ballot this November. One of them, Proposition 111, would end predatory payday lending in our community and across the state.
As lawmakers here in Aurora, we think it’s important for our neighbors to understand the impact of this practice and vote yes on Proposition 111.
Would you pay $293 in interest on a short-term $500 loan? Do you think paying 129 percent APR sounds reasonable? That’s exactly what happens with so many of our Aurora neighbors when they borrow money from out-of-state payday lenders.
Here’s how it works: Out-of-state payday lenders are targeting hardworking Aurora residents with promises of fast cash, but these lenders are really leaving them trapped in debt. By charging triple-digit interest rates on loans that are hard to pay back, borrowers are often forced to ask the lender for more money the next month just to make ends meet. Lenders also have direct access to borrowers’ bank accounts so that they get paid — even if that leaves the borrower with overdraft fees or not enough money to cover necessities.
In 2016, the average payday loan was $392 and had an average APR of 129 percent and payday lenders advertise loans that can go over 200 percent APR! These predatory practices are hurting families and they are just plain wrong.
These lenders specifically target women, veterans, people of color, students and struggling families. In 2016, payday lenders stripped nearly $50 million dollars in fees and interest payments from financially-strapped Coloradans.
That money could have been spent in local communities, but instead went to lining the pockets of lenders.
Thankfully, Coloradans have the chance this election to stop the debt trap by voting yes on Proposition 111.
Over a decade ago, Congress capped the interest rate on payday loans offered to active-duty military and their families at 36 percent. Now 15 states and the District of Columbia have also passed laws capping payday lending rates and fees at 36 percent.
This is just what Prop 111 is proposing to Colorado voters. As the Aurora Sentinel said in their endorsement of Prop 111, “The proposed reforms are fair to the lending industry and help to protect borrowers from financial ruin and misery. It limits loan interest rates to 36 percent and eliminates the gravy-train fees lenders are allowed to impose on borrowers.”
Payday lenders are not the solution, they are the problem, and they don’t belong in our community. We are proud to endorse Prop 111 to stand up for Aurora families and end the cycle of debt. We urge Aurora voters to Vote Yes on Prop 111 and put an end to triple-digit interest rates!
— State Senator Nancy Todd (D-Aurora) represents state Senate District 29, State Senator Rhonda Fields (D-Aurora) represents state Senate District 29, State Representative Dominque Jackson (D-Aurora) represents House District 42, State Representative Janet Buckner (D-Aurora) represents House District 40, State Representative Mike Weissman (D-Aurora) represents House District 36, via [email protected]