More than 120,000 Nebraskans signed onto a petition drive to cap payday loan rates at 36%, meaning the initiative will likely appear on November ballot.
The petition drive, organized by Nebraskans for Responsible Lending, easily exceeded the roughly 85,000 signatures — about 7% of the state's registered voters — it needed before the July 3 deadline.
If ratified by the Nebraska Secretary of State, the initiative will give voters the chance to change state law, which currently allows payday lenders to charge interest rates of 400%.
"For too long, we've heard stories from families who have been caught up in cycles of debt because of unaffordable loans," said Aubrey Mancuso, who helped organize the petition drive. "The Legislature has failed to address this time and again."
Annually, Nebraskans pay about $28 million in fees to payday lenders who typically offer small loans to those who may not be able to borrow elsewhere. Opponents to the measure say the cap would likely drive lenders out of business.
Richard Blocker, who has epilepsy, said he took out a two-week, $500 loan from a lender in his neighborhood, paying $75 to the lender up front. When he was unable to pay back the loan in full, he had to take out more loans over a period of more than three months.
"By the time it was all paid off, there were eight loans in all," he said. "I don't want to see other people taken advantage of. It is a much needed initiative to help protect citizens."
The Rev. Damian Zuerlein of Saint Frances Cabrini Church in Omaha said his parish has witnessed many who get "trapped in a cycle of having to pay those predatory lenders," which prevents them from paying rent, utilities or putting food on the table for their families.
"This is not a new problem," Zuerlein said, adding the Catholic Church does not condemn lenders for charging interest, but said assessing fees well in excess of the loan allows them to "feed on people who are hurting."
Other states, 16 in all, as well as the District of Columbia, have enacted 36% payday loan interest caps, and in 2006, Congress passed a 36% cap for active-duty military personnel.
Mick Wagoner, director of the Veterans Legal Support Network and a former Marine, said that action did not protect veterans or reservists from being charged exorbitant interest rates, however.
"I saw a lot of Marines in my time who fell prey to predatory lending, and the military saw a lot of problems with it," he said. "That's why I'm so proud to be a part of this effort."
Other members of the coalition include AARP Nebraska, the ACLU of Nebraska, Community Action of Nebraska, Habitat for Humanity of Omaha, Heartland Workers Center, the National Association of Social Workers-Nebraska Chapter, Nebraska Appleseed, Nebraska Children's Home Society, Omaha Together One Community, Voices for Children in Nebraska, the Women's Fund of Omaha, Youth Emergency Services and YWCA Lincoln.
The group got a jump-start through a $500,000 contribution from the Sixteen Thirty Fund in Washington, D.C., which backs liberal political causes and has funded similar efforts elsewhere.
Mancuso said once Nebraskans for Responsible Lending learns the signatures have been verified, the coalition will turn its attention to educating voters.
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