The new report from the Pew Charitable Trusts ("Data Detail Payday Loan Costs," Sept. 20), helps separate the fact from fiction on HB 2191, a bill that would legalize payday loans in the commonwealth at 300 percent APR.
As a nonprofit credit-counseling agency, we are appalled by the bill. We provide housing and credit counseling services to Pennsylvanians struggling with financial stress. Our clients would be the very targets of HB 2191's predatory loans. They are individuals and families living paycheck to paycheck who could easily fall prey to a payday lender's promise of a quick financial fix. As the Pew data reveal, this is an empty promise, with the average borrower trapped in this high-cost debt for more than five months.
HB 2191 purports to address illegal Internet lending. However, both the Pew data and our own experience reveal that illegal Internet lending is not a significant problem. Our existing law has successfully curbed payday lending abuses, and hasn't driven would-be borrowers to take out these loans over the Internet.
In the rare cases that clients may be trapped in Internet payday loans, we can help them. The loans are illegal here. If HB 2191 passes, the payday loan debt trap would be written into state law, increasing the very harms it claims to solve.
As such, we urge our area senators (Don White, Kim Ward and Jim Brewster) who sit on the committee where the bill resides to reject HB 2191.
STEPHEN J. PIOTROWSKI
President/CEO Advantage Credit
Counseling Service Inc.
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