A new report sheds light on the dangers of payday loans, prompting consumer advocates to call for new regulations in Michigan. Community Economic Development Association of Michigan Senior Policy Specialist Jessica AcMoody tells us by charging annual percentage rates equivalent to 340%, payday lenders cost Michiganders more than $94 million in 2016 alone. She says these loans target the vulnerable.
“Payday loans are a high-cost solution to a short-term problem and they’re really built to take advantage of borrower’s financial vulnerability. So what they’re doing is locating in communities where they can prey on financial vulnerable people. “
Beyond educating consumers about payday lending, AcMoody contends policymakers need to examine APR caps, and reconsider measures to expand payday loan offerings. AcMoody says the research also reveals payday lenders are specifically targeting Michigan communities with higher concentrations of people of color and those with lower incomes.