People who depend on a short term loan to get through to another payday could see their money pool drying up if Congress passes a new bill.
The bill, HR 1214 sponsored by Rep. Luis Gutierrez, (D-Ill) Chairman of the Subcommittee on Financial Institutions, puts a cap on what payday loan institutions can charge for a loan.
“The status quo of the payday lending industry is unacceptable and the bill provides a federal safety net for the working poor,” Gutierrez said.
Almost all local payday loan offices are corporate-owned. Inquiries were referred to a corporate spokesperson.
Check n Go company spokesperson Jeffery Kursman said the legislation goes too far and infringes on consumer choice.
“For a lot of people living from paycheck to paycheck the payday loan is their only salvation for unexpected costs, such as car repairs, or other unforeseen expenses,” Kursman said.