Michigan Senate Takes Bold Step to Cap Payday Loan Rates Protecting Vulnerable Communities

The Michigan Senate recently passed legislation that caps payday loan interest rates, a move particularly impactful for areas predominantly inhabited by Black and Brown populations. Spearheading this legislative effort were state Sen. Sarah Anthony (D-Lansing) with Senate Bill 632 and Rep. Jennifer Conlin (D-Ann Arbor) with House Bill 4343, both receiving the Senate’s endorsement after initial approval by the Michigan Senate Finance, Insurance and Consumer Protection Committee in February. Sen. Anthony’s bill introduces a pivotal change by capping the annual percentage rate (APR) for payday loans at 36%, a stark contrast to the existing rates that can soar up to 370%. This measure aims to alleviate the financial strain on individuals trapped in a cycle of debt due to excessive loan interest rates. Anthony expressed her motivation for the bill, reflecting on her experiences in Lansing: “Growing up on the southside of Lansing, I remember seeing predatory lending facilities as well as liquor stores and fast food all around me, and it always bothered me that because I came from a marginalized community, that individuals and organizations and businesses tried to basically come into our community and prey on the most vulnerable among us. As we delve into the complexities...