Moneytree has branches throughout the Northwest, including Post Falls and Coeur d’Alene.
finances
Debt Trap Short-term lenders are facing new regulations across the country. Idaho could be next BY HEIDI GROOVER
I
n a sunny backyard, kids are running through a sprinkler and snacking on watermelon. Inside, two young women with big toothy smiles stand in the kitchen as a voiceover chimes in. “When we were trying to make ends meet last month, family came to rescue,” the woman’s voice says. “My sister told me she went to Moneytree for a payday
loan to cover unexpected costs. It couldn’t be easier.” The exchange is part of an ad for Moneytree, one of the region’s biggest payday lenders, which could soon see its operations in Idaho dwindle. Indeed, payday loans are easy to get — most people qualify with a check stub. That makes them attractive for many low-income people, but also drops them squarely
Young Kwak photo
inside a fight over whether the service is usury or necessity. In recent years, the debate over payday loans and the fees that come along with them has flared across the nation. States set their own regulations for payday lenders, and they’ve found plenty of ways to handle it. Today, at least 15 states cap interest rates — Georgia has one of the lowest, at 16 percent annually — while others, including Washington, limit the number of these loans a person can take out each year. Next door, Idaho has no interest rate or loans-peryear ceilings. Moneytree charges $16.50 on a two-week $100 loan — the equivalent of 430 percent annually — and most other short-term lenders in the state charge a similar rate. At least one state senator is looking to change that. Sen. Lee Heider, R-Twin Falls, says he’s working on a bill that would require all short-term lenders to outline the terms of loans to borrowers, and place a 36-percent cap on annual interest rates for payday loans. (Heider says he hasn’t finalized all the bill language, so he may reconsider, ...continued on next page
JANUARY 31, 2013 INLANDER 13