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Today, CoPIRG staff joined the other leaders of the Coloradans to Stop Predatory Payday Loans campaign to drop off 78 boxes containing 188,045 signatures at the Colorado Secretary of State’s office to cut and cap the interest rates and fees predatory payday lenders charge in Colorado. The number of valid signatures needed to qualify a statutory ballot measure for the November ballot is 98,000.
“We are so proud to be part of such a broad and growing coalition to rein in predatory payday lending in Colorado,” said Danny Katz, CoPIRG Director. “A 200 percent APR is ridiculous, unconscionable, and our measure will cap it at 36 percent, which is what every other financial product in Colorado has to abide by.”
Payday loans are small loans with extremely high APRs. For example, a Colorado payday loan borrower pays an average of $119 in fees and interest to borrow $392. That’s an average annual percentage rate (APR) of 129% but it can go as high as 215%.
The ballot measure, Initiative 126, will decrease those rates from over 200 percent to 36 percent, inclusive of fees. 36 percent is the current state usury cap that only payday loans are exempted from. Payday loans force struggling families into cycles of debt by charging extremely high interest rates on loans that make repayment very difficult.
The ballot measure is supported by a broad and diverse coalition including faith leaders, veterans, advocates for low-income families and consumers.
Fifteen states and the District of Columbia already stop predatory payday lending within their borders by enforcing interest rates caps of 36 percent or less. Studies have shown that access to credit doesn’t change in states that cap interest rates.
The Secretary of State’s office has the next few weeks to validate the signatures and assign Initiative 126 its place and new number for the November 6th ballot.
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