December 22, 2014

IowaWatch Connection: Payday Loans

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Easy Cash Solutions, on First Avenue in Cedar Rapids, is pictured on February 26

Inma Mateos/IowaWatch

Easy Cash Solutions, on First Avenue in Cedar Rapids, is pictured on February 26

For many who are in trouble financially, their only option is to get money from a payday loan or “E-Z cash” business. But the fees, charges and interest that go with that can lead to big trouble down the road.

“It’s a trap that you get into when you go there. You have a situation that occurs, either you need money for rent or you need money for your gas or electrical because your paycheck was short or you have a car emergency. Once you get into the payday loan, it’s a trap. You’re in and you’re not getting out,” said Brian Curtis, of Davenport, who once faced about $27,000 in payday loan debt.

Payday loan companies provide small-dollar, short-term loans that dodge state usury laws, allowing payday lenders to charge annualized interest rates as high as 400 percent.

Yet, repeated attempts to place stricter regulations on the industry have failed to garner interest from state legislators, despite support from the Iowa Attorney General’s Office.

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