What would a 36% Interest Cap Do?

1. If not specifically tailored toward the elimination of the payday industry (loans of less than 60 days) it would outlaw the regulated installment loan industry which has existed since Texas became a state, See Warrant Companies;
2. Cut off credit to low income families (despite what you have been told, banks don’t want to make installment loans of less than $2,000 for a period of 4 to 24 months to low income families);
3. Cut off credit to families with moderate to poor credit (this would include bad debt write offs for medical debts and student loans, which characterizes many of our customers)
4. Cut off credit to low income families in emergency situations;
5. Create an environment for organized crime, leaving low-income families with no choice but to seek out the local illegal loan shark who may use less than human collection tactics;
6. Cause the elimination of over 200,000 jobs in the regulated loan industry;
7. Cause a significant and long-term recession due to the loss of jobs and the unavailability of credit to low income families.

Payday Loans:

1)  Payday Lenders do not consider if a person can afford to pay back the principal of the loan;
2)  Payday Lenders seek to refinance your loan every 14 days, causing you to incur additional interest and fees every 14 days;
3) If you don't refinance you must pay off the entire loan in 14 days;
4) No state regulation or oversight in most cases;
5) Often do not report positive credit information to credit reporting agencies. 

Regulated Installment Loans:

1) Provides Small loans (less than $2,000) to persons with flawed credit, including bad debt write offs;
2) Considers your ability to pay back the entire loan;
3) Provides a fixed payment plan to pay off the loan in 4 to 24 months;
4) Closely regulated by each state including on site audits by state agencies
5) Helps the consumer establish or reestablish credit