The U.S. House passed their rent-a-bank bill to allow payday lenders to circumvent state interest rate caps.
U.S. Rep. Greg Gianforte voted for HR 3299, which could eviscerate our state’s ability to enforce interest limits and stop predatory lending.
In Montana, voters chose to permit payday loans but lenders can’t charge more than 36 percent, effectively creating some of the best protections against payday and other abusive loans in the country. We save an estimated $37 million annually from leaving our pocketbooks and our state with this victory.
Banks can ignore this law, and some lenders have teamed up with banks to offer loans with interest rates at 100-300 percent or higher that would otherwise be illegal in our state.
Unaffordable payday loans and other triple-digit interest predatory loans have devastating consequences for financially distressed borrowers — trapping them in cycles of debt and increasing the likelihood of delinquency on other bills, delayed medical care, bankruptcy and eviction.
It’s unfortunate that Rep. Gianforte decided the ability of payday lenders to scam their constituents is more important than the rule of law, one that Montanans voted for with an overwhelming majority.