Clergy To Head To Kansas City For Release Of New Federal Payday Loan Regulations

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SPRINGFIELD, Mo. – A group of southwest Missouri clergy will hop on a bus Thursday morning to speak out against the payday loan industry.    

That afternoon, the federal Consumer Financial Protection Bureau is expected to release new payday and title loan regulations in Kansas City.

In Missouri, about 2 million payday loans are underwritten each year, and they carry on average an annual percentage rate of 450 percent.

The faith voices group believes so many people are turning to these lenders because Americans have lost a sense of community.

“It was a never-ending cycle,” said Payday Loan Borrower Jennifer Trogdon.

According to the Federal Reserve, one in two Americans are like Trogdon — they cannot come up with $400 in an emergency.

When Trogdon needed a car repair few years ago, she turned to a payday lender.

“The original loan I believe was $450 and we ended up paying back thousands of dollars on it,” Trogdon said. “Once you pay it off, you have to re-borrow, you pay it off, and you have to re-borrow, just keeping going.”

“I’ve known several people who have been involved in these programs and they’re legal,” said Mary Kay Glunt, a former pastor. “But they’re not moral.”

Less than 1 percent of banks and credit unions offer loans for $500 or less, but payday loan shops are located at almost every major intersection in Springfield.

“We’re not a community anymore,” Glunt said. “We don’t know our neighbors; we don’t live by our families. We don’t have people who can help us and yes low wages are a big part of it.”

The leaders at faith voices have been trying to match people like Trogdon with resources in the community.

At University Heights Baptist Church, the congregation worked out a partnership with a local credit union — now Trogdon’s just chipping away at the principal.

“We had a payday loan and a car title loan,” Trogdon said. “With the payday loan, University Heights had a program called University Hope and they helped us by paying off the payday loan and now our payments are only $20 a month. And we paid off our title loan just before Mother’s Day.”

Trogdon hopes her story can prevent others from falling into a trap.

“I hope that the people will listen to us and it will make a difference,” Trogdon said.

The Consumer Financial Protection Bureau is expected to place new rules on judging a borrower’s ability to repay and is expected to require lenders to create a pathway out of debt.

The agency has Republican opponents in Congress and Rep. Debbie Wasserman-Schultz, the national chair of the Democratic Party, surprised political observers when she came out in opposition of the regulations this year.
 

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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