Last year, the Maryland General Assembly passed HB1294 which legalized payday lending in Maryland for the first time in more than 50 years.

Now, cash-strapped low-wage workers can use apps on their phone to take out a loan until the next payday. App-based short-term lenders charge large fees which means these loans have a 90%-300% APR, three to ten times Maryland’s approved rate of 33% for other consumer loans. And these out-of-state lenders request tips from hardworking Maryland residents for simply borrowing their own money.

Take action to protect Marylanders from predatory payday loans today! 

While these payday loan apps are legal, there are still a lot of things we can do to curb the most predatory aspects of these payday products. SB94/HB237 was heard in Senate Finance last week and in the House Economic Matters committee yesterday. SB94/HB237 would prohibit payday lenders from requesting tips from low-income borrowers.

This is a good first step, but more must be done to protect Maryland residents from these high-cost debt traps pushed by corporations who profit off of workers living paycheck to paycheck. 

We believe that the bill must also:

1. limit the total maximum monthly cost to $10 a month;
2. prohibit payday lenders from repeating debiting a bank account to collect;
3. make it easier to cancel if an individual has a subscription, and
4. require annual reporting of loans, repeat usage and costs.

While it is concerning that Maryland has legalized payday loans, we have an opportunity to rein in the worst excesses and protect everyday Marylanders from these predatory loans. Let your senator know that we need affordable and sustainable credit, not products that allow out of state corporations to profit off of households struggling to make ends meet.

Take action to protect Marylanders from predatory payday loans: support SB94/HB237 with amendments!

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