Wine & Conversation: The Payday Lending Problem
Ken Smith, Staff Attorney for the Economic Justice Program at Nebraska Appleseed will speak on the current landscape of payday lending in Nebraska including how a payday loan works, how they are regulated, and how they function to trap borrowers in a cycle of debt. Mr. Smith will go into detail about why payday lending reform is needed at the state and federal level and cover the current legislative proposal in Nebraska.
A payday loan is a short-term, small dollar loan, generally for five hundred dollars or less, that becomes due on the borrower’s next payday. A borrower writes a check dated for the next payday or gives a payday lender authorization to directly debit a checking account. When the borrower’s next payday arrives, that income is typically absorbed by regular expenses and the borrower cannot afford to pay the loan and fees in full right away. The borrower is left with only one option – to pay a fee to the lender to renew the loan. Without enough income to pay off the loan, a borrower repeats this process of simply paying renewal fees and sinks deeper into debt. In Nebraska, payday loans carry an average annual interest rate of 461%.
This event is sponsored by a grant from the Ruth Frisch & Oscar Belzer Endowment Fund and is free and open to the community. Light refreshments will be served. For more information and to make a reservation, please contact Scott Kurz, 402.334.6570, or firstname.lastname@example.org.