PROVIDENCE, R.I. (AP) — Payday loan businesses are fighting a proposal to cap interest rates in Rhode Island, saying it could force them to close and deprive their customers of a useful financial tool.
Dozens of employees from local lenders gathered at the Statehouse Tuesday as lawmakers reviewed legislation to cap loan interest at 36 percent. Now, payday loans come with annualized interest rates of up to 260 percent.
The bill’s sponsors, Rep. Frank Ferri and Sen. Juan Pichardo, say the loans trap low-income residents in a cycle of debt. The bill has failed in recent years after running into industry opposition.
Jamie Fulmer of Advance America says his company charges $10 for a two-week $100 loan. He says new restrictions could force his company to close its businesses in Rhode Island.