The American Prospect
Nation of Change
Last year, activists in Missouri launched a ballot initiative to cap the rate for loans at 36 percent. The story of the ensuing fight illuminates the industry’s tactics, conducting an underhanded campaign to derail the ballot initiative; and a sophisticated and well-funded outreach effort designed to convince African-Americans to support high-cost lending.
Subscribe to payday loans
Payday, installment and auto-title lenders have more than 1,400 locations in the state — about one store for every 4,100 Missourians. The average two-week payday loan, which is secured by the borrower’s next paycheck, carries an annual percentage rate of 455% in Missouri, more than 100 points higher than the national average. A coalition of faith groups, community organizations and labor unions decided to put forward the ballot initiative to cap rates at 36%.