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How predatory payday lenders keep customers hooked

If he who conspires to silence the poor had hands, the shame would be his thumbs.”
Julia K Dinsmore


“I was in my late twenties and had a few jobs and wasn’t very financially secure,” said a Cranston resident Kieran Wilder in a phone call with UpriseRI. “Honestly, I had never heard of these payday loans, but a friend of mine told me he had one.

“I started with a loan of $300 to Moving America Forward at Cranston. You withdraw $300, you pay them $330. In the future, I couldn’t afford to pay it back, so I took out another loan to pay the first one, and in total, I did it, every two weeks, for about six months.

That “easily” added up to more than $360 in interest over the round of loans, Kieran told UpriseRI.

“They ask you to give them a check when you take out the loan, the check to use at the bank in case you can’t make the payment,” said Kieran, who has never had a bank overdraft problem because he always renegotiated a loan.

“I always paid off the loan, I just needed to always take out another one so I didn’t run out of money,” said Kieran, who emerged from the payday loan cycle with the help of his father, who eventually lent him the money to get free.

After paying off the loan, Kieran hoped to put the experience behind him, but then, starting in the summer of 2021, nearly a year after being cleared of payday loan debt, Kieran started getting calls company on both his personal cell phone number and his work phone.

“The first thing you think of when you get the call is ‘Oh shit! Did I forget to pay it back? “Kieran said. “But they basically called to say, ‘Hey, do you need the money? “” Kieran received two of the calls on this phone and forwarded them to UpriseRI. Their calls have been changed to remove the store’s prehistoric phone number.

It took time for Kieran to overcome his reluctance to share his story. “Obviously I didn’t want to look like a broke kid,” Kieran said. “I was embarrassed to even be in that loan cycle. I was dating at the time and wouldn’t let her see the papers. But enough time has passed that I’m less embarrassed.

“The ladies working the payday loan company counter were super nice,” Kieran said. “I have nothing against them. I’m sure they are also low-income workers.

UpriseRI contacted Margaux Morisseau, one of the leaders of the Coalition for Payday Loan Reform, which plans to step up its efforts against predatory payday loan companies at this session’s General Assembly.

“Payday loan companies drain millions of dollars every year from Rhode Islanders,” Morissau said. “These predatory lending has been curbed in many states and now is the time for Rhode Island to end this usurious practice as well. A cap rate of 36% APR is the best solution. Voters overwhelmingly support this reform and you can bet it will be a big deal this election year.

Previous efforts to cut punitive interest rates from payday lenders in Rhode Island were thwarted by former House speaker Nicolas Mattiello who had a close relationship with the payday lender lobbyist William Murphy, who is himself a former Speaker of the House. Murphy is paid $30,000 a year to lobby for Advance America.