In a ruling last Wednesday, the Minnesota Supreme Court maintained the constitutionality of Minnesota’s out-of-state lending law. The lawsuit, filed by Minnesota Attorney
General Lori Swanson, was against the ironically named Integrity Advance — a loan company in Delaware charging interest rates of up to 1,369 percent on payday loans to Minnesota borrowers. Integrity Advance, LLC violated Minnesota’s payday lending statutes more than one thousand times in 2013.
Minnesota is one of the leading states in combatting the astronomical interest rates of online payday lending. According to state law, payday lenders must be licensed by the Minnesota Department of Commerce. The law sets a cap on interest rates and prevents online lenders from using collected interest to pay off other loans.
With online lending on the rise, it seems companies such as Integrity Advance are preying on low-income individuals who have no other option. To that end, the Consumer
Financial Protection Bureau estimates 80 percent of payday loans are rolled over at least once, and one-quarter of them are rolled over at least six times.
In order to further combat the upward spiral of manipulative payday loan companies, Minnesota needs to tighten its lending restrictions even further. Limiting the number of loans and fees that can be applied to each borrower would be a good start. We should not accept financial exploitation, and Minnesota should continue to combat the people who profit from payday loans.