Missouri: The Reverse Robin Hood State

Posted on September 7, 2011 at 4:06pm by

Forget all that malarkey that Missouri is The Show-Me State. Women’s Voices Raised for Social Justice contends that ‘Missouri: The Reverse Robin Hood State’ would be a far more appropriate state motto these days.

Women’s Voices members argue there are far too many instances in which the wealthy profit off the misfortunes of the poor in Missouri. They aim to do something about it.

“We are getting behind the petition drive for a state law to restrict the gouging done by the payday loan industry,” said University City resident Barb Finch, a founder of the Women’s Voices group. “We plan to collect signatures to get it on the ballot. It’s scandalous that Missouri is known for this kind of abuse.”

New payday loan outlets have grown like Topsy in the St. Louis area since the bottom fell out of the economy in 2008. They consist of lenders who promise quick, short-term cash in a crunch, but then they hit desperate borrowers with “debt trap” interest rates.

The Consumer Federation of America notes that females, renters, students, minorities and the newly unemployed are especially prone to predatory loan practices.

Missouri allows an APR (annual percentage rate) of interest of up to 1,950 percent based on a two-week loan of $100, by far the highest of nine contiguous states. The next highest used to be Arkansas with a 520 percent APR, until the Arkansas Supreme Court stepped in and declared the rates “usurious” and a violation of the state’s constitution.

Investigative work by the St. Louis Better Business Bureau’s (BBB) Bob Teuscher has revealed payday loan licenses being taken out by company directors of dozens of nursing homes. Payday lending operations are established at the homes. Thus, the elderly, as well as poorly-paid nursing home workers, become vulnerable to predatory practices.

A 2009 report to the legislature showed that of the nine contiguous states, only Missouri allows renewals of payday loans b allowing up to six renewals. This situation puts many desperate borrowers into holes that are simply far too deep and costly for any recovery.

“The payday loan industry is very powerful, and the people who use their services are not so well off,” said Corey of BBB. “The loan laws are particularly weak in Missouri, which means that state residents who can least afford it are out millions of dollars a year.”

Women’s Voices is out to turn this situation around. Watch for them and their petitions on a street corner near you. They want to put an end to: “Missouri: The Reverse Robin Hood State.” – Source