“Payday lending is usury and it is a horrible exploitation of low-income Rhode Islanders,” said Barrington resident Susannah Holloway, testifying before the Rhode Island House Committee on Corporations. “The slumlords of banking make billions of dollars every year of those who can least afford it with payday loans.”

In Rhode Island, people have been advocating for over 13 years against the practice of payday loans, which are high-cost loans structured to perpetuate an ongoing cycle of debt. As the Center for Responsible Lending (CRL) explains, “payday lenders are actually providing access to debt, not credit.” The advocacy against these loans has been blunted by corporate capture of the Rhode Island legislature. As Uprise RI has written in years past, former Speaker of the House William Murphy, who maintained a close friendship with Speakers Gordon Fox and Nicholas Mattiello, is paid as a lobbyist by payday loan company Advance America. At $30,000 a year, the investment in Murphy is a good deal for an out of state industry that sucks over $7 million a year out of Rhode Island’s poorest communities.

See:

• 2019-04-10 The General Assembly continues to be complicit in the evil of payday loans
• 2022-01-24 How predatory payday lenders keep customers hooked
• 2022-03-25 The arrogance of Rhode Island’s payday loan industry

Though versions of the bills to abolish payday loans have been submitted for well over a decade, members of the legislature are still surprised to learn just how awful the debt trap they create can be. Committee Chair Joseph Solomon Jr (Democrat, District 22, Warwick) expressed surprise when Representative Robert Phillips (Democrat, District 51, Woonsocket) told a story about a constituent who was levied hundreds of dollars in bank overdraft fees when a payday loan company attempted to collect a debt by repeatedly submitting a check to the bank, knowing there were insufficient funds.

Phillips’ constituent was hit with $200-300 a day in overdraft fees.

“I didn’t know that,” said Chair Solomon. “That’s awful if that’s happening.”

Representative Karen Alzate‘s bill, H5160 was the better of the two bills introduced, and simply repeals “the provisions of the general laws allowing deferred deposit providers, also known as ‘payday lenders’.” Representative John Lombardi‘s bill, H5331, attempts to get to the same place by capping “the annual percentage rate (APR) for payday loans to 28%; require a maturity date of more than 90 days from loan closing; prohibit fees and interest payments of more than 60% of the principal loan amount; and require that payments be made monthly, with each payment being no more than 25% of the loan’s original principal.”

Here’s the video:

• 00:00 Representative Karen Alzate (Democrat, District 60, Pawtucket) introduces H5160
• 03:00 Representative John Lombardi (Democrat, District 8, Providence) introduces H5331
• 06:58 Representative Enrique Sanchez (Democrat, District 9, Providence)
• 08:47 Robert Craven Jr on behalf of General Treasurer James Diossa
• 12:52 David Veliz, Director of the Rhode Island Interfaith Coalition to Reduce Poverty
• 15:01 Bill Staderman, President of the Rhode Island Association of Financial Service Centers
• 18:04 Susannah Holloway
• 22:35 Margaux Morriseau
• 29:18 Eric Hasselhurst
• 30:17 Alan Krinsky, Economic Progress Institute
• 35:54 Julie Townsend, from Purpose Financial, “a leading provider of regulated consumer credit which operates nice Advance America storefronts in Rhode Island.”
• 44:07 Leo Sullivan, Access America
• 50:11 Kevin McElroy, RI NASW (National Association of Social Workers)

Written testimony in opposition to payday lending and in support of th bills to eliminate them came from:

• Rhode Island Commission for Human Rights
• Economic Progress Institute
• AARP Rhode Island
• Rhode Island Working Families Party
• RI KIDS COUNT
• National Association of Social Workers
• Center for Responsible Lending
• Capitol Good Fund

• Lieutenant Governor Sabina Matos
• Attorney General Peter Neronha
• General Treasurer James Diossa
• Secretary of State Gregg Amore
• Juan Pichardo PVD City Councilmember Ward 9

• Patricia Keefe, Kingstown resident
• Heidi Ross, BSW, MA Social work advocate
• Daniel Liparini, North Kingstown resident
• Carol Martin, West Warwick resident
• Angela Ryding, Warwick resident
• Shawn Sellick, Providence resident