Payday loans are small-dollar loans due on a borrower’s subsequent payday. In Blue Earth County, in 2021, the common payday mortgage dimension was $355, and the price of borrowing this quantity for 2 weeks computed to an appalling 294% annual share price.
One may overlook this exorbitant rate of interest if debtors took out one mortgage, climbed out of debt and walked away happy. However that isn’t the fact surrounding this predatory mortgage product.
Minnesota Division of Commerce information present that the standard payday mortgage borrower in Blue Earth County takes out a mean of 14 loans per yr, getting trapped in a vicious and endless cycle.
I vigorously oppose these practices which exploit individuals’s monetary issues for revenue. This yr my church neighborhood, First Presbyterian Church of Mankato, signed on to be an endorsed group for Minnesotans for Honest Lending.
This organizing group is searching for to go an ordinance on the metropolis stage in Mankato which might forestall the debt entice, mimicking an ordinance handed unanimously in Moorhead in 2020. Our congregation is obsessed with social justice and advocacy, and we imagine backing this trigger is one other means for us to place religion into motion.
We as a metropolis have the ability to make a extra economically simply neighborhood and regulate these loans primarily based on our values. I encourage you to achieve out to the Mankato Metropolis Council to be taught extra about this challenge impacting the lives of so lots of our neighbors!
Bailey DeVetter
Mankato
