For Immediate Release
June 5, 2009

Contact:
David Higuera (520) 907-2080

TUCSON, AZ – Yesterday, religious, civil rights and consumer groups briefed  congressional lawmakers and staff on why all families should be covered by the 36 percent rate cap on consumer loans that already protects military families.

Bishop Minerva Carcaño of the Desert Southwest Conference of the United Methodist Church was one of the panelists for the briefing.

At the briefing, Bishop Carcaño shared Arizona’s victory against the payday lenders, examples of how Arizonans are trapped by payday loans’ triple-digit interest rates, and why usurious lending is an issue of concern for people of all faiths.

Stated Bishop Carcaño, “The issue of payday loans is an economic justice issue, a moral issue.  Arizona certainly laid the groundwork last year.  Now the federal government must build upon that to protect all consumers.”

As a result of the defeat of the payday lenders  fake “reform” in November’s election, all Arizonans will benefit from a 36 percent cap in July 2010, when the sun sets on payday lenders’ 400 percent interest rates.

The briefing comes as Congress considers proposals to cap annual interest rates at 36 percent for consumer loans.  In 2006 Congress passed such a loan cap for military families. A two-digit cap is the only measure that has stopped predatory payday lending in the 15 states and the District of Columbia, where it is enforced.

Payday loans, which often carry an APR of 458 percent in Arizona, trap the average payday borrower in a cycle of debt that forces the borrower to pay much more in interest and fees than he or she originally borrowed.

The Congressional briefing focused on new research released by the Center for Responsible Lending showing that payday lenders overwhelmingly locate in African-American and Latino neighborhoods, even after controlling for income and other factors.

In 2008, examination of payday lending storefront locations in Maricopa and Pima Counties—in which over three-quarters of Arizona payday lenders are located—reveals a pattern of these stores clustering in communities of color.

“I am excited to hear that we are sharing the powerful impact of Arizona’s victory with Congressional leaders,” said Peggy Hutchison, executive director of Tucson’s Primavera Foundation.

“Arizona voters clearly said that a 36% rate cap is needed to keep families from being stripped of their hard-earned income and wealth.  Congress has a tremendous opportunity to make the right decision, one that will stabilize neighborhoods and increase wealth among the working poor across the country.”

The groups sponsoring today’s briefing were the Black Leadership Forum, Center for Responsible Lending, Consumer Federation of America, Inter-religious Working Group on Domestic Human Needs, Leadership Conference on Civil Rights, NAACP and the National Black Caucus of Local Elected Officials.

Each supports the need to rid the nation of payday loans with triple-digit interest rates.

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