Nebraskans voted on November 3 to pass a measure that sets limits on interest rates that payday lenders can charge in the state.
The ballot initiative, Measure 428, passed by roughly 83% on Tuesday night, putting Nebraska in the leagues of other states regulating the sometimes-predatory industry. The American Civil Liberties Union noted that Nebraska became the 17th state in the country to enact some sort of consumer protections against payday loans.
“This is a huge victory for Nebraska consumers and the fight for achieving economic and racial justice,” ACLU National Political Director Ronald Newman said in a statement. “Predatory payday lending makes racial inequalities in the economy even worse — these lenders disproportionately target people of color, trapping them in a cycle of debt and making it impossible for them to build wealth.”
Payday lenders in Nebraska will now have to cap their annual percentage rate at 36%, down from the astronomical rates that some borrowers were previously subjected to.
Tonight, Nebraska overwhelmingly chose to #VoteFor428!
Predatory lenders have targeted seniors, communities of color, and low-income residents with absurdly high rates for far too long, and tonight voters put a stop to their debt trap.
Congrats, Nebraska! pic.twitter.com/MoCdUcbkts
— Vote For 428: Nebraskans for Responsible Lending (@VoteFor428) November 4, 2020
Kiran Sidhu, policy counsel at the Center for Responsible Lending added that the measure was a crucial move amid the pandemic, but called for federal reform to follow Nebraska’s move.
“We must come together now to protect these reforms for Nebraska and the other states that effectively enforce against debt trap lending,” Sidhu stated in a press release. “And we must pass federal reforms that will end this exploitation across the country and open up the market for healthy and responsible credit and resources that provide real benefits.
Aarthi is a reporter for Yahoo Finance. She can be reached at email@example.com. Follow her on Twitter @aarthiswami.