In Minnesota, licensed payday lenders can legally charge triple-digit annual interest rates. Based on our analysis of the most recent data from the Minnesota Department of Commerce, licensed lenders report an average APR of 215% in 2019. Exploitative licensed lenders, and worse still, illegal operations, have wreaked economic havoc on Minnesotan communities for far too long. It’s time to stop the debt spiral.
To do so, we’re continuing our fight to get a 36% effective interest rate cap in Minnesota. Last month, our Executive Director, Sara Nelson-Pallmeyer, and Board President, Eric Howard, spoke before the House Commerce Finance and Policy Committee on the importance of such a statewide, fees-included rate cap.
If you want to read the specifics of the proposed legislation, check out HF 102 or SF 892.
As our leadership pursues long-term policy solutions, our on-the-ground efforts to help individuals stuck in the debt spiral continue. Even though last year was – to put it lightly, A LOT – our program team continued enrolling participants, refinancing predatory debt, and saving Minnesotans money. In 2020, Exodus Lending paid off more than $70,000 worth of predatory payday, title, and installment loans for 84 Minnesotans. In doing so, we estimate saving them about $220,000 in interest and fees that they may have otherwise paid to predatory lenders over a year’s entrapment – meaning we surpassed $1,000,000 in savings all-time for our participants! Additionally, over the course of the year, 103 Minnesotans graduated from our program by completing repayment with us. And despite the uncertainties that remain in 2021, we eagerly look forward to serving more Minnesotans.
For every milestone or statistic listed above, there is an individual behind it. Our current and future borrowers are our partners, and they are always our highest priority. We are so proud to have worked alongside every one of them on their journey toward financial stability. One of our participants, Blake*, shared his story about overcoming struggles with addiction and predatory debt. Reflecting on his experience in our program, he said,
“It was like a godsend. Like, we can get help up outta this, and start paying some bills. I’ve been able to build a life.”Blake, Program Participant
*We have changed the participant’s name because of confidentiality.
Predatory Lending in the News
In case you missed it, here are some of the latest news items on predatory lending:
Lastly, Exodus Lending’s office remains closed. Our team is working remotely and can be reached by phone at (612) 615-0067 or by email at [email protected].
Exodus Lending E-Newsletter: February 2021