Florida seniors may be hit hardest by new payday loan legislation

Inside Subprime: February 5, 2018

By Caroline Thompson

As we reported last week, Florida legislators have voted to move forward with a bill which would create a new category of payday loan, allowing customers to borrow up to $1,000 – twice the current limit of $500. In addition to the jump in loan limit, the bill would lengthen loan term limits from 31 days to between 60 and 90 days. While this might seem like good news for cash-strapped Floridians, senior advocates in the Sunshine State are pushing against the the bill, saying it preys upon older Americans who may be unaware of the high interest rates they’re signing up for.

“Some borrowers end up in a ‘debt trap’ and lose everything, even their homes,” wrote Jeff Johnson Florida state director for AARP in an email to members. “In fact, payday lenders in Florida have already stripped more than $2.5 billion dollars in fees from Floridians since 2005, with more than $311 million collected last year alone. Wealth stripping affects us all and negatively affects our communities.”

Back in July, a report from the California Department of Business Oversight found that Californians 62 and over took out $2.7 million in payday loans in 2016, a near-triple rise from the year before. Payday and other predatory lenders often prey upon the elderly, an issue which has been on the forefront of several lawsuits over the past year.

Back in August, Minnesota Attorney General Lori Swanson filed suit against two out-of-state companies that, according to Swanson, violated Minnesota state lending laws by “issuing loans to Minnesota borrowers without being licensed as a lender, and by calling the transactions “purchase agreements” of a pension, not a loan.”

“These companies had veterans and seniors sign over significant portions of their monthly pensions and benefits for years to come in exchange for much smaller immediate cash payments to cover basic living costs, medical bills, and household emergencies,” said Swanson in an August statement. “A pension is supposed to provide financial security, and people should be very cautious about giving away their future pension benefits to get just pennies on the dollar in immediate cash. Borrowers’ finances can become even tighter down the road if they relinquish their future monthly pension payments.”

Whether or not the bill is passed, Florida seniors deserve better than a payday loan when they need fast cash. For more information on payday lending in Florida, check out these related pages and articles from OppLoans:

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