Payday loan companies in Missouri have sensationally been accused of trying to bully churches as the argument about the high interest rates charged by short-term lending companies escalates nationwide. Missouri seems to be in the middle of the most newsworthy payday loan struggles as certain consumer rights groups attempt to push through legislation which would cut the maximum interest rate allowed on emergency loans in the state.

Legal Letters

Churches in Kansas City claim to have received threatening letters from a law firm in Grapevine, Texas. The letter is alleged to warn churches and other groups not to get involved in the fight over the proposed legislation. The bill would reduce the maximum annual interest rate that can be charged on a payday loan to 36%. Companies in the industry are vehemently opposed to such a ruling which they say will put them out of business. They pointed to other states where the 36% rule was imposed and resulted in hundreds of loan companies closing down with thousands of jobs lost nationwide. Payday loan proponents suggest that low income families would suffer and need to borrow from actual loan sharks who are known to charge very high interest rates.

Threats or Facts?

The law firm involved in the controversy is ‘Anthony & Middlebrook’. It has been revealed that the letters sent by short-term loan companies are not illegal. It transpires that the companies involved merely reminded the groups in Kansas City that distributing false affidavits or signing a different person’s name on a petition was against the law. Churches were also informed that further lobbying in a bid to push the legislation through could result in the loss of their tax-free status. Again, this is not illegal as churches and charities are prohibited from supporting or opposing candidates by Federal law.

Fundraising

‘Anthony & Middlebrook’ represent ‘Missourians for Equal Credit Opportunity’ which is a campaign committee who believe that citizens in Missouri deserve the chance to choose or reject financial assistance as they see fit. In other words, they want people in financial trouble to choose where they receive a short-term loan rather than having this choice taken away from them. The group has embarked on an extremely successful fund raising campaign and has raised $850,000 to date with the lion’s share of the money coming from a non-profit organization called ‘Missourians for Responsible Government’.

The group hopes to use their vast donation money to fight against the legislation which they feel will lead to the end of payday lending in the state of Missouri. Their main defense of short-term lending is the lack of viable options. There are a number of unregulated lenders operating in the state of Missouri who offer loans under the most repressive of conditions. According to the ‘Missourians for Equal Credit Opportunity’, payday loan companies are extremely well regulated and offer loans at reasonable rates. As Missouri continues to be a hotbed for payday loan agitation, the only thing certain is that neither side will give up.

Related posts:

  1. Kansas City Groups Try To Find Alternatives to Cash Advances
  2. Storefront Payday Loan Companies Respond To CFPB Meeting
  3. Warning Issued By Debt Charities against Companies Offering 0% Interest Payday Loans
  4. New Hampshire Governor Vetoes Legislation That Will Increase Maximum Payday Loan Interest Rate
  5. Why Instant Cash Loan Companies Are More Honest Than Banks