ANNAPOLIS, Md. – The Maryland State Senate is scheduled to vote this afternoon on HB 1294, legislation that would exempt payday loans made through cell phone apps from the state’s usury law, which limits annual interest rates to 33% APR.
"Maryland policymakers should reject this legislation, which would legalize cellphone app payday loans that regularly trap people in debt,” said Whitney Barkley-Denney, deputy director of state policy at the Center for Responsible Lending. “These predatory apps differ in style but not in substance from the storefront payday loans that Maryland has banned. These apps typically charge annual interest rates well above 100% APR and result in users reborrowing dozens of times a year."
Barkley-Denney added, “The weak fee limits in HB 1294 would allow debt to snowball into an avalanche that buries consumers. The bill has no limits on fees that pretend to be ‘tips.’ This legislation would expose Marylanders to greater harm by legalizing loan sharks in their pockets."
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Press Contact: Matthew Kravitz matthew.kravitz@responsiblelending.org