Two years ago, the Pew Charitable Trusts issued a study revealing Idaho had the highest payday loan interest rates in the nation, with Gem State lenders charging as much as 582 percent annual interest. The Idaho Community Action Network has repeatedly tagged payday lending as "a vicious cycle." Even Idaho Department of Finance Director Gavin Gee, whose agency licenses, examines and regulates the lenders, dubbed extended payment plans through payday loans a "debt trap."
On Feb. 2, Gee announced stricter oversight has triggered a 34 percent decline in licensed payday lenders in Idaho, from 223 at the end of 2014 to 147 at the end of 2015. In particular, Gee pointed to "increased scrutiny" from the U.S. Consumer Financial Protection Bureau, created in 2011. The CFPB is currently mulling new federal regulations that would require "more robust underwriting practices," limiting short-term loans to 45 days and the establishment of a 60-day "cooling off period after a borrower has taken out three such loans in a row."
Meanwhile, ICAN leaders say those new rules can't come soon enough.
"Every day the CFPB delays, more financial damage is done to American families," ICAN board member Miranda Davis said at a rally in Boise late last month. "I work hard as a single mom and the last thing I needed when I borrowed money was to get trapped in a cycle of debt that was nearly impossible to get out of. My wages were garnished and it hurt my family more than if I had just let my power be shut off."
ICAN officials said their research indicates each day CFPB delays in enactment of the proposed rules, U.S. families lose another $23.9 million, totaling more than $8.7 billion annually. The proposed rules were unveiled in March 2015 and, while CFPB officials have indicated they want the restrictions to go into effect sooner than later, no timetable has been put forward.