Chief author Senator Judy Seeberger vows to continue to protect Minnesotans from bad actors and predatory practices
St. Paul, Minn. – Predatory payday loans are a thing of the past in Minnesota thanks to recent law change that into effect on January 1. The new law, a result of legislation authored by Senator Judy Seeberger (DFL-Afton), will cap the interest rates on these loans to help prevent Minnesotans from falling into debt traps.
“People deserve protection from predatory actors and practices which take advantage of their desperation. Payday loans are nothing more than legalized loan-sharking,” said first-term Senator Seeberger, who is the Vice-Chair of the Senate’s Commerce and Consumer Protection Committee. “That changes with this new law. This law puts a stop to these practices in Minnesota by preventing exploitation of those in dire financial needs, and ends profiteering from their desperation.”
While the previous average rate of a payday loan in the state of Minnesota was 202%, the new law caps the interest rates of payday loans at no higher than 50%, with most loans capped at a rate of 36%. Furthermore, Senator Seeberger carried legislation expanding access to character-based short-term loan programs to assist individuals reach financial stability and resolve payday loans. These interest and fee-free loans will help those Minnesotans facing significant barriers to mainstream financial products.
“We are reducing barriers and obstacles for Minnesotans to help them recover from financial hardship and move towards the financial stability that will help them and their families succeed,” added Seeberger. “Our committee is serious about consumer protection, and we will continue help working families and take on those bad actors who try to profit of their misfortune.”
Senator Seeberger plans to introduce additional legislation that would protect Minnesotans from predatory lending practices in the upcoming sessions, which begins on Tuesday, February 12.