Group gathers to crack down on payday loan shops - KCTV5 News

Group gathers to crack down on payday loan shops

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KANSAS CITY, MO (KCTV) -

A large and organized interfaith action group is tackling predatory lending.

The decades-old group, Communities Creating Opportunities, included that issue, along with health and safety, at a rally at Union Station Tuesday night.

A group needs 90,000 signatures to stop local payday loan shops from charging a sky-high interest rate.

John Miller is a lawyer, a Northlander and a Methodist.

"These are issues that cut across the state line. They cut across racial divides. They cut across all areas of our community. They are interests that we share," said John Miller, with Platte Woods United Methodist Church.

Miller is one of about 600 people near the end of the two-hour-long rally. Organizers say attendance peaked at more than a thousand.

Circulating among the crowd was a petition for a Missouri ballot initiative that would cap the annual percentage rate on what are now described as predatory loans at 36 percent.

The current legal cap in Missouri is almost 2,000 percent. Sound impossible?

Remember: it is an annual percentage rate. Take the weekly rate, for example, since many pay day and title loans are short term, and then add the rollovers often required to avoid default.

It's something one of the participants had a painful personal experience with - paying so much interest on a few $500 loans that he lost his house over it.

"These payday loan people, they target the poor. They target the disenfranchised that can't get money anyplace else," said Elliott Clark, with St. Therese Little Flower Parish.

Clark borrowed $2,500, five loans of $500 each.

After just three years, he has paid $30,500 in interest alone, and he still hasn't paid that off.

Clark rents now. And that home, where his children grew up, where he lived for 15 years, has been vacant ever since he was foreclosed on a year ago.

Copyright 2011 KCTV. All rights reserved.

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