PROVIDENCE, R.I. (AP) — Members of the Rhode Island Senate Commerce Committee are set to hold a hearing on a plan to curb interest rates charged by payday lenders to people desperate for access to credit.
Payday lenders offer small, very short-term loans with extremely high interest rates that are effectively advances on a borrower’s next paycheck. They’re typically obtained when a borrower goes to a check-cashing outlet or an online equivalent, pays a fee and writes a postdated check that the company agrees not to cash until the customer’s payday.
Recommended Stories
Critics say the loans frequently trap low-income residents in debt.
A bill sponsored by Providence Democratic Sen. Juan Pichardo would limit payday lenders’ annual interest rates to 36 percent by making them subject to the same usury laws governing other lenders.
The Commerce Committee will hold a hearing on the measure Tuesday.
