According to a new AARP survey, a majority of Louisianans believe it is important to strengthen consumer protection laws to prohibit excessive annual interest rates for payday loans.
“Payday loans drain millions from hard working Louisiana families,” said Nancy McPherson, State Director, AARP Louisiana. “Older adults who are on fixed incomes are particularly vulnerable to the lure of quick cash to pay for prescriptions, utilities and groceries. They often find themselves trapped in long-term cycles of debt.”
After hearing that payday lenders in Louisiana can currently charge up to 780 percent annual percentage rate (APR), 60 percent of those surveyed supported changing state law to prohibit annual interest rates above 36 percent.
Payday loans are billed as cash advances to help borrowers deal with money emergencies between paychecks. These short-term loans typically must be fully paid off in two weeks.
According to the survey, 69 percent of Louisianans indicate an APR of less than 30 percent would be the highest rate these loan businesses should be able to charge.
Louisianans believe in the importance of strengthening consumer protections which would prevent excessive APR’s for payday loans. Nearly six in ten Louisianans said they would be more likely to vote for a state candidate who supports capping payday loan interest rates at 36 percent. Nearly the same amount would be more likely to vote for a state candidate who supports capping the number of loans an individual can borrow in a 12-month period.
The 2013 AARP Louisiana Survey on Payday Lending was a phone survey fielded by RDD Inc. between October 2 and October 7, 2013 and yielded 600 completed interviews. The final sample was weighted by age and gender for adults age 18 and older residing in Louisiana. The margin of sample error is +/-4.08 percent.