A group of clergy is asking the Constitution Revision Commission to adopt a proposal capping payday loan interest rates at 30 percent per year.
The proposed constitutional amendment was filed last Friday, records show, by Bishop Adam Jefferson Richardson Jr. of the African Methodist Episcopal Church. Proponents, who held a Tuesday news conference at the Capitol, said it was modeled after a similar initiative in New Mexico.
“We think that it’s immoral,” said the Rev. James T. Golden, also of the AME Church in Sarasota County. Golden, also an attorney and a Democrat, ran unsuccessfully last year for the House District 73 seat held by Republican Joe Gruters.
The issue of interest on payday loans, defined as “usually a short-term, high cost loan, generally for $500 or less, that is typically due on your next payday,” has long caused angst among consumer advocates, regulators and others.
The payday loan industry has argued they’re providing a needed service for people of little means, especially if they don’t have good credit.
But opponents view it as a form of predatory lending that traps especially lower-income workers in endless cycles of debt, often with interest that reaches triple digits.
Payday loans “allow people to sink deeper into poverty,” Golden added.
The state of New York recently settled a case with two payday-loan operators that forbids them “from working in the state and forcing them to forgive roughly 20,000 loans worth roughly $12 million,” the New York Post reported this week.
Federal law now caps payday loan interest at 36 percent for active-duty service members and their dependents.
Advocates said their proposal—one of more than 1,400 now filed—has not yet been formally championed by any commissioner. A proposed amendment must be nominated by a CRC member and then get support from at least 10 commissioners.
The commission is formed every 20 years to review and suggest changes to the state’s governing document. For any proposal to be added to the state Constitution, it must get 60 percent approval of voters on the 2018 statewide ballot.
The full body will start considering proposals next Monday.
A link to a Periscope video of the press conference on the CRC proposal can be viewed below:
— Jim Rosica (@JimRosicaFL) September 26, 2017