LINCOLN, Neb.–Nebraska’s voters have voted overwhelmingly in favor of a ballot initiative that caps rates on payday loans at 36%.
Roughly 83% of Nebraska voters approved Measure 428. With its passage, Nebraska is now one of 17 states, in addition to Washington, D.C., to impose restrictions on payday loan interest rates and fees, according to the ACLU.
“This is a huge victory for Nebraska consumers and the fight for achieving economic and racial justice,” Ronald Newman, national political director at the ACLU, said in a statement. “Predatory payday lending makes racial inequalities in the economy even worse — these lenders disproportionately target people of color, trapping them in a cycle of debt and making it impossible for them to build wealth.”
Previously, the average interest rate for a payday loan in Nebraska was 404%, according to the Nebraskans for Responsible Landing Coalition, which helped get the initiative on the ballot.
100,000 Sign Petition
As CUToday.info reported here, more than 100,000 people signed a petition to put the matter on the ballot.
In the run-up to the election, media reports featured people who had been victimized by such loans, including one man who borrowed $500 from a payday lender, paying a $75 fee for two-week loan. Ultimately, the man ended up paying $5,800 in fees on the loan.
According to reports compiled by the Nebraska Department of Banking and Finance, which regulates payday lenders, about 50,000 people took out payday loans last year. The average loan was for $362 and the average person got 10 loans over the course of the year.