OMAHA, Neb. (WOWT) -This week Nebraskans overwhelmingly voted to cap the interest on payday loans.
Going forward if you need a quick loan from a payday lender, those lenders will not be able to charge you interest over 36%.
That’s something those impacted by the high interest rates have been fighting for in Nebraska for years.
“I saw one in my neighborhood and I thought it would be just go in quick and get the loan and be able to pay it and have it paid off,” says Richard Blocker.
Richard Blocker turned to a payday lender in 2014 when he could no longer afford medication he needed.
“My loan was at 465%.”
Blocker says he knew the interest rate would be high but what happened next… he did not expect.
“It took me renewing the loan eight times before I was finally able to get out of it by picking up a part time job,” says Blocker.
Blocker is not alone.
Tiffany Seibert Joekel is the research and policy director at the Women’s Fund for Omaha.
She knows just how devastating the high interest rates can be for Nebraskans.
She says payday loans are often marketed as a quick fix.
But that’s far from the reality many face.
“When a family takes out a loan because they can’t afford their bills the likelihood that in two weeks when that loan becomes due that their financial situation will have monumentally changed and they can now afford all their bills and all their additional amount of payment to pay back the loan just isn’t a reality for many families,” says Tiffany Seibert Joekel, research and policy director at the Women’s Fund for Omaha.
Now payday loans will be capped at 36% rather than the over 400% many borrowers were dealing with.
“This initiative will impact our communities broadly and will help protect folks who find themselves in difficult economic situations.” says Seibert Joekel.
Blocker says this is a huge step forward for Nebraskans who need some financial help.
“There’s a lot more options out there now,” says Blocker.
Payday lenders say that capping interest rates can cause unintended consequences – hurting people who need money quickly.
Here in Omaha there is a non profit called lending link.
They are working to be an alternative for those that need a payday loan.
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