Nebraska Interest Cap Regulation Reduced Consumer Payday Loan Options

(p. A1) Nebraska’s payday lenders have all shut down in the two years since voters capped the interest rate they could charge.

The last handful gave up their delayed-deposit services business licenses in December [2021], according to records kept by the Nebraska Department of Banking and Finance.

Just six months earlier, there had been 19 such businesses.

. . .

. . ., Ed D’Alessio, executive director of INFiN, a national trade association representing delayed-deposit businesses, said the closures were predictable, based on the experience of other states that have imposed similar rate caps.

“Nebraska’s 36% rate cap on delayed-deposit loans was never about consumer protection,” he said. “It was about activists’ thinly veiled desire to eliminate a regulated service valued by many.

“But Nebraskans’ need for credit did not go away. Instead, they have been left with fewer options for managing their financial obligations,” D’Alessio said.  . . .

Payday loans, also known as cash advances, check advances or delayed-deposit loans, are a type of short-term, high-cost borrowing that people use to get small amounts of immediate cash.

For the full story, see:

Martha Stoddard. “Payday Lenders Disappear From State After Rate Cap.” Omaha World-Herald (Tuesday, Sept 13, 2022): A1-A2.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story was updated Oct. 18, 2023 [sic], and has the title “Payday lenders disappeared from Nebraska after interest rate capped at 36%.”)

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