Payday loan reform group hosts events

One Salina woman’s experience has led to her helping others in similar situations and highlights the need one group is pushing to recognize across the state.

At 10 a.m. Tuesday at Salina Media Connection and simultaneously joining other speakers at sites in six cities across Kansas, Claudette Humphrey, director of stabilization services for Catholic Charities of Northern Kansas, spoke of being a single parent and having her car break down a few years ago.

Humphrey said she was trying to be responsible and take care of her own problems, so she took out a payday loan.

"I didn't understand that two weeks later on a $500 loan I would need to pay them $575," Humphrey said.

Humphrey said with what her paycheck was, she had to re-loan multiple times before taking a second loan to take care of her first loan. It was a seemingly never-ending cycle.

She considers herself lucky — she had family that could help her get out of the situation and pay off the loans.

"That is not the case for so many of the clients I see every single day walking into my office," Humphrey said. "(People) who are devastated about their finances. Who, because they've needed one of these loans to get a car repair, to keep up with a utility bill, to pay their rent, suddenly are in the same situation, only worse."

David Norlin, representing Kansas Interfaith Action, said reform could be helpful not only to those who take out loans but also to the state as a whole.

"If our proposed reforms are adopted, Kansas can experience a likely $30 million stimulus to our economy," Norlin said. "And it won't cost the state government a dime."

From the state capital

At the rally in Topeka, another story of payday loans was told.

Former Hays resident Annie Ricker was confident she could quickly pay off $750 borrowed from a payday lender to meet unexpected medical and automobile expenditures.

By the time the debt was satisfied, Ricker had paid more than $3,000 to the lender.

Ricker, pastor at Berryton United Methodist Church, joined two dozen people in Topeka for its simultaneous protest Tuesday. She said Kansas law enabled companies to charge rates as high as 391%.

"We want Kansas to reform its laws to ensure that, one, people have enough time to repay the loan in affordable installment plans over months not weeks," Ricker said. "And to limit the amount to no more than 5% from each paycheck."

Kathleen Marker, CEO of the YWCA of Northeast Kansas, said a coalition of 20 religious and secular organizations would make themselves heard during the 2020 session of the Kansas Legislature on the loan issue. Thousands of financially vulnerable people across the state can benefit from reasonable limits on lending, she said.

"We're here to launch a campaign for everyday Kansans to take back this state and proclaim a moral economy, one that is fair and one that is just," Marker said.

Topeka resident Anton Ahrens said the federal government had imposed interest-rate restrictions applicable to members of the military. That model can be useful to policymakers at the state level, he said.

"Why shouldn't ordinary citizens get the same rights?" Ahrens said.

Joyce Revely, of Kansans for Payday Loan Reform, said short-term lenders prey upon women, children, veterans and seniors in the community. She said Kansans ought to be fed up with companies taking advantage of the most vulnerable people.

Borrowers who struggle to repay loans fall behind on basic expenses and end up turning to charities and government programs for help with those fundamental costs of living, she said.

The Kansas bank commissioner's office reported that in 2018 about 685,000 title or payday loans were made with a value of $267 million. In Kansas, a company can legally charge interest sufficient to transform a $300 loan into a $750 obligation in five months.

"Predatory payday and auto title loans, as they exist today, are unjust and abusive," Ricker said at the brief rally outside LoanMax. "The reforms we propose will help borrowers use the loans as intended, a temporary bridge, and not an inescapable rap."