The latest from a study by the non-profit Corporation for Enterprise Development shows 56 percent of Nevada’s households are locked into the “new normal” of persistent financial insecurity.
The study, which looks at Americans’ ability to stay out of poverty, ranked Nevada at the bottom – 48th for the second year in a row.
Part of that is fed by the need for state residents to seek short-term, high-interest loans. So-called payday loans. In many cases, Nevadans are paying more than 500 percent interest on these loans.
It’s no surprise that Nevada’s laws governing payday loans are some of the most lenient in the country. These companies can charge whatever interest rate they want.
Now, Nevada State Treasurer Dan Schwartz has announced his plans to hold what he calls a payday loan summit this week in Las Vegas.
In announcing the summit, Treasurer Schwartz said “most, if not all, who use these loans end up in a worse place than where they started.”
Schwartz told KNPR's State of Nevada that he is not out to end the payday loan industry, but "we are certainly going to look at correcting some of the abuses."
He said some of the changes that need to be looked at include loan maximums, interest rate caps, fees for creating the loan and extending it, and possible limits on the total amount one lender can loan.
“There’s a lot of… different aspects of the payday loan industry that, I think, can be cleaned up," he said.
Schwartz said while there are some people who need quick cash before their next paycheck the majority of people who get payday loans don't pay them back.
“They are the people who least can afford it,” he said.
Schwartz would like to hold a public hearing on the issue in the future and then have some legislation ready to purpose in February.
Dan Schwartz, state treasurer, State of Nevada
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