Monday, January 23, 2012
A Kansas City nonprofit is offering an alternative to the payday loan industry for people who need small loans.
The Fair Community Credit group is a consortium of churches, bankers, lawyers and nonprofit agencies that plan to offer small loans.
The group says it hopes to issue 500 loans this year, ranging from $300 to $2,500. The loans will carry double-digit interest, rather than the triple-digit interest charged with payday loans.
The payday loan industry has been criticized for charging excessively
high interest that makes it difficult for borrowers to escape the debt.
But Randy Scherr, a lobbyist for United Payday Lenders of Missouri, says the industry helps people who need quick cash, and is always upfront about the interest it charges.