The short-term loan put the 412-mile trip to Port Lavaca within reach. It was costly, but her only option. But Heinaman's grandmother and other low-income borrowers would have a harder time getting an emergency loan of that type if the legislation Congress is considering to cap interest rates on all consumer credit transactions passes.
Both critics and supporters of the bills agree the popularity of payday lenders and other shortterm creditors highlight the need for credit among the country's poor and their inability to obtain loans traditionally.
Two bills, one from Sen. Dick Durbin (D-IL), the other from Rep. Jackie Speier (D-CA), would cap interest rates on the loans at 36 percent. The legislation is aimed at payday lenders, but pawnshops and other short-term lenders say the cap would also keep them from making a...(register to read more)