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Posted: Tuesday, 07 April 2009 3:49PM
Durbin: payday loans 'nothing short of outrageous'
Steve Miller Reporting
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CHICAGO (WBBM) -- Senator Dick Durbin says some of the interest rates charged by payday loans are "nothing short of outrageous," and he's sponsoring a bill to limit those rates.
Senator Durbin stood at the corner of Franklin and Van Buren with a payday loan office as his backdrop.
(Lisa Gonzalez of Chicago)
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"I think the situation is totally out of hand. Whether you're talking about credit card accounts, whether you're talking about these payday loan operations, the interest rates they're charging now are nothing short of outrageous."
Lisa Gonzalez of Chicago says she fell prey to payday loans, and she admits some of the responsibility for not reading the fine print.
"It is as much my responsibility as it is theirs. I do however feel that charging 500 percent interest on any loan is ludicrous."
Senator Durbin wants to limit interest rates and fees to 36 percent, the same cap currently in place for the military.
Durbin is touting federal credit unions, which lend at a much lower rate than payday loan offices.
The payday loan industry says those federal credit unions are eligible for government help, which the payday loan offices are not.
Durbin's backdrop was a PLS Loan Store, which is a payday loan office.
Bob Wolfberg, the president of PLS Loan Store, says, "PLS and our 3-thousand employees look forward to working with Senator Durbin in ensuring that we can continue to offer the most affordable and most convenient means for hundreds of thousands of consumers interested in borrowing a few hundred dollars for a few weeks."
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