Bemidji City Council hears presentation on payday loan laws
The Bemidji City Council met for the first time on Monday for a working session during which they learned about Minnesota’s laws on payday loans.
The presentation was made by the group Minnesotans for Fair Lending. Based on the information in the video Minnesota law permits a standard three-week payday loan of $380 that can cost up to $40 and an annual rate of that can range from 5% to 275% https://ipass.net/.
Furthermore, large lending firms have different licensing requirements that smaller lending institutions, and thus avoid laws. In their presentation MLF representatives suggested that the regulations in the state need to be more stringent to safeguard customers from the high cost of borrowing.
One example of these regulations is an ordinance that was approved by the city of Moorhead, Minn. The law permits no more than two loans of less than $1,000 per calendar year.
The ordinance also provides the following:
- The minimum payment is due within 60 days from the loan’s initial.
- For loans that range from $350 to $1,000, lenders aren’t permitted to charge more than 33% in annual interest.
- The lender is not allowed not to charge an added fee to an extension, or to increase the balance due above the initial amount.
- There are no more than four companies offering consumer loans can be found inside the metropolis.
After the presentation at the end of the program, the Ward 1 councilmember Audrey Thayer expressed interest in an identical ordeal for Bemidji.
Ward 3 councilmember Ron Johnson and Mayor Jorge Prince Meanwhile, they said an alternative is pushing for a change to state law in the Minnesota Legislature. Johnson suggested the issue could be discussed with lobbying groups like The Coalition of Greater Minnesota Cities and the League of Minnesota Cities for discussion during the legislative session.
Three states close to the region have passed laws on payday loans:
- The state of North Dakota, the Legislature established a maximum loan amount of $500. It also established an interest rate of 60 days.
- The state of South Dakota, a ballot initiative was passed that caps interest rates at 36%..
- A measure on the ballot in Nebraska has set the maximum payday loan annual percentage rates at 36%..