LINCOLN — A coalition of Nebraskans announced plans Friday for a ballot initiative taking aim at high payday loan rates. The group, called Fair Lending for Nebraskans, filed documents with the Secretary of State’s Office to start an initiative petition drive. The proposal seeks to cap payday loans at 36% annual interest.
“Consumers in Nebraska should be able to access credit that is fair and responsible,” said Aubrey Mancuso of Voices for Children, who is part of the coalition supporting the effort. “Unfortunately, the current law permits payday loans that are harmful and lock people into a debt cycle that is hard to break free from.”
Currently, payday lenders in Nebraska charge more than 400% annual interest on loans. Critics say that, though the loans are marketed as short-term, borrowers commonly cannot meet the unaffordable terms and end up paying hundreds or thousands of dollars in fees over time. They fall farther behind on their bills and often lose bank accounts or even end up in bankruptcy.
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