Borrowers bled dry

Source: New York Times (Free Registration)

State legislatures unknowingly legalized loan sharking when they exempted short-term, “payday” lenders from usury laws that generally capped interest rates at about 36 percent. The lenders, which now charge interest of 400 percent or more, got the exemption by arguing that small loans that were paid off quickly would help families through emergencies and keep them out of long-term debt.

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