Letter to the Editor - Montana's members of Congress should support stopping unfair lending

A Google search or Netflix documentary will tell you, payday loans are predatory. Lenders offer small loans with interest rates averaging over 390 percent. CNBC reports loans in Ohio, Kentucky, Texas, Nevada, Utah and Wisconsin with rates from 500 percent to 600 percent, targeted toward underbanked people experiencing unforeseen financial hardships.

The Consumer Financial Protection Bureau found that over 80 percent of payday loans were rolled into new loans after two weeks. This catches people in a cycle where little money is paid to the principle, instead payments cover rollover charges and fees accrued from insurmountable interest.

Some states, including Montana, and active-duty servicemembers are safe from these debt trap loans. But what about the rest of the country? The CFPB, 15 states and the military have expressed the havoc these loans cause people.

Congress, right now, can protect people from the harms of these loans. Mirroring protections passed in the Military Lending Act, the Veterans and Consumers Fair Credit Act would ensure borrowers are offered affordable loans. This is a positive step that will prevent people from becoming stuck in endless cycles of debt.

I urge Sen. Daines, Sen. Tester and Rep. Gianforte to help those impacted by payday loans by supporting the VCFCA.

Josh Culbertson

Billings