“The Payday Playbook: How High Cost Lenders Fight to Stay Legal”

That's the name of this lengthy piece by Paul Kiel of ProPublica. It focuses on an effort in Missouri to cap the rates on payday loans. Here's a short excerpt:

Outrage over payday loans, which trap millions of Americans in debt
and are the best-known type of high-cost loans, has led to dozens of
state laws aimed at stamping out abuses. But the industry has proved
extremely resilient. In at least 39 states, lenders offering payday or
other loans still charge annual rates of 100 percent or more. Sometimes,
rates exceed 1,000 percent. Last year, activists in Missouri launched a ballot initiative to cap
the rate for loans at 36 percent. The story of the ensuing fight
illuminates the industry’s tactics, which included lobbying state
legislators and contributing lavishly to their campaigns; a vigorous
and, opponents charge, underhanded campaign to derail the ballot
initiative; and a sophisticated and well-funded outreach effort designed
to convince African-Americans to support high-cost lending. Industry representatives say they are compelled to oppose initiatives
like the one in Missouri. Such efforts, they say, would deny consumers
what may be their best or even only option for a loan. Missouri is fertile soil for high-cost lenders. Together, payday,
installment and auto-title lenders have more than 1,400 locations in the
state — about one store for every 4,100 Missourians. The average
two-week payday loan, which is secured by the borrower’s next paycheck, carries an annual percentage rate of 455 percent in Missouri. That’s more than 100 percentage points higher than the national average, according to a recent survey by the Consumer Financial Protection Bureau. The annual percentage rate, or APR, accounts for both interest and fees. … The problem was the legislature. During the 2010 election cycle alone,
payday lenders contributed $371,000 to lawmakers and political
committees, according to a report by the nonpartisan and nonprofit Public Campaign,
which focuses on campaign reform. The lenders hired high-profile
lobbyists, and [Missouri Democratic Representative Mary] Still became accustomed to their visits. But they hardly
needed to worry about the House Financial Institutions Committee,
through which a reform bill would need to pass. One of the lawmakers
leading the committee, Don Wells, owned a payday loan store, Kwik Kash.
He could not be reached for comment.

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