Proposed Cap on lending would hurt Nebraska’s low-income families
Too many policies with noble intentions end up hurting the very Americans they are supposed to be helping. For a prime example, look no further than the November ballot. Initiative 428 would place a government-imposed price control on the level of interest that lenders are allowed to charge borrowers on a short-term “payday” loan. This is an onerous rule that is more likely to decimate credit markets for Nebraskans in desperate need of a small, quick loan.
Initiative 428 prohibits lenders from charging an interest rate in excess of 36%, imposes new restrictions on fees, and limits the ability for lenders to advertise to customers. Small-dollar lenders tend to help rather than hurt the people they serve. According to Pew Charitable Trusts, “69% used it to cover a recurring expense, such as utilities, credit card bills, rent or mortgage payments, or food; and 16% dealt with an unexpected expense, such as a car repair or emergency medical expense.” Small-dollar credit products help them deal with everyday household expenses and that unforeseen emergency that can happen to anyone from any income level.