Rev. Amelia Richardson Dress: Support caps on payday lending; vote yes on Proposition 111

"Sometimes the money runs out before the month runs out."

The comment was made by a hard-working construction worker as they requested temporary assistance to cover groceries for the month. Unfortunately, it's a fact of life for many Americans who struggle to make their paycheck cover their daily expenses. When the money runs out before the month does, one option is a short-term, high-interest loan, or "payday lending." While this presents an attractive solution — quick lending, lower requirements and easy access — it's often the start of a vicious cycle of debt. In Colorado, payday lenders are allowed to charge triple digit interest rates, up to 215 percent APR. (The Denver Post reports the state average is 129 percent.) Thanks to the magic of compounding interest, this adds up at an unfathomable rate.

Payday lenders can provide a much-needed service to people in a financial crisis, but the lending practices and high interest rates are predatory, turning a vulnerable family's time of need into a long term nightmare, all while the lender profits. Not only do these practices harm borrowers, they damage our state economy. Over $50 million a year is spent on interest for payday loans, directing money into large national payday lending companies instead of into our local economy.

Proposition 111 on our state ballots this year proposes capping the interest rate for payday lenders at 36 percent. This is an important corrective to current lending laws and is supported by advocacy groups across the state, including the Interfaith Alliance and Together Colorado, which are both interfaith clergy groups of which I'm part.

Please vote yes on Proposition 111 this November.

Rev. Amelia Richardson Dress

Pastor, United Church of Christ

Longmont

Ana Temu