Let's End Payday & Predatory Lending!
Why are Rhode Islanders treated this way?
Why are Rhode Islanders treated this way?
Press Conference & Lobby Day - Join us on Thursday, April 10, 2025 to support payday and predatory lending reform! Learn more
It’s hard to think of another statute in the Rhode Island General Laws that so manifestly targets and harms a specific group as the statutory carve-out empowering storefront payday lenders to ensnare low-income Rhode Islanders in cycles of debt. This practice drains around $3 million in fees a year from vulnerable consumers — and from our own economy — and sends most of that money out of state, mainly to one company that’s located in South Carolina.
Yet, this has been our law since the mid-2000s. And in the interim, predatory payday lenders have made hundreds of thousands of these loans, charging cash-strapped consumers 260% interest rates and compounding the financial damage with other harms such as increased difficulty paying bills, delayed medical spending, involuntary bank account closure, and higher likelihood of filing for bankruptcy.
The very profit model of the payday lending industry is based upon capturing people in a cycle of debt. No other New England state has a statute nearly as anti-consumer and pro-industry as Rhode Island. Shamefully, 93% of all payday lending fees a year in New England originate in Rhode Island. A similar law in a much more conservative state, Texas, has led to Texas accounting for more than half of the total $2.4 billion in payday borrowing fees nationwide. This has begun to prompt anger among Texans, with a recent headline in the Houston Chronicle quoting a victim asking, “Why are Texans treated this way?”
A more relevant question for us is, “Why are Rhode Islanders treated this way?”
We ask you to join us in solidarity on April 10 when we will promote Rep. Alzate’s bill, HB-5042, and Sen. Quezada’s bill, SB-229, which will close this unconscionable legislative carve-out. Also, we will refute the specious claim that payday loans meet a need that is otherwise unmet in the marketplace — because there are good Rhode Island and national financial institutions and organizations that offer small loans, with low fees and interests ranging from 5% to 30%.
