Faith Voices of Southwest Missouri Continues Pushing for Interest Rate Cap on Short Term Loans
An event in Springfield Monday had various speakers touting the need for a cap of 36 percent on interest rates on short term loans in Missouri.
Faith Voices of Southwest Missouri called it the Legislative Spring Break Press Conference.
Members aren’t happy with proposed legislation by Missouri State Representative Steve Helms, chair of the Subcommittee on Short Term Financial Transactions.
Instead of an interest rate cap, Helms wants to address what he called in an interview on KSMU by the League of Women Voters of Southwest Missouri “the most egregious thing” by capping the maximum amount a person pays on a loan and reducing the number of allowed rollovers on a loan.
He said capping the interest rate at 36 percent would have detrimental consequences.
"You would shut the industry down," he said. "Folks that truly have a need would have nowhere to go. The military solved this by having loans within the military, so the military's picked up the slack. But for the average person out there, there would be no industry and there's not enough money with nonprofits that would be able to pick up the slack."
He referred to a 36 percent cap by the federal government for active duty military members, which he said has resulted in banks not lending to those on active duty. That’s because, according to Helms, banks can’t make any money on those loans due to the cost of processing them.
But Michael Overton, senior pastor of First Baptist Church, who spoke at Monday’s Faith Voices event, said a 36 percent cap on interest rates is the right thing to do.
"If a 36 percent cap is right for our active military personnel then surely it is right for the rest of the population," he said. "If 17 other states saw it to be right and have survived with a 36 percent rate with all fees included, surely Missouri can do what is right and survive, too."
Dr. Bob Perry, a member of Faith Voices of Southwest Missouri, says he had hoped the voices of Missouri’s working poor would finally be heard this legislative session, but he said that hasn’t happened.
"The voices being heard are still those of the big money people who use a portion of their huge payday loan profits to reward legislators," he said. "The common people have barely a whisper. The industry and the wealthy have a megaphone."