There are dozens of places in Rhode Island that will advance you money with few questions, and ask you to pay back with a 10 percent fee in two weeks.
The problem is when the two weeks come up and you can only pay the 10 percent.
“Once you start it, it’s very hard to get out of it. It’s very hard. There are ways you can, but can you afford to? That’s the issue,” said Jackie McWhinnie.
Jackie fell into the trap some years back when a family member’s medical emergency caused her to need money fast.
“I owned a home, went through some hardship and desperation. And when banks don’t want to lend it to you anymore, it was the only option we had to save our home,” she said.
But with Jackie and her husband both taking out the maximum $450 every other week, the interest payments swamped them and they ended up with nothing.
“I filed bankruptcy. I’m not proud to say it but I did what I had to do. I thank God for where I am, very grateful for where I am right now. But I’m doing this to help people out there,” she said.
Jackie is testifying in favor of a bill sponsored by state Rep. Leo Medina, D-Providence, who is not trying to put payday loan stores out of business.
“Unfortunately it’s a bad necessity. Most of the people who go to them don’t have good credit, don’t have another option or don’t have the ability to go to the banking system,” Medina said.
Medina’s calling for the 10 percent interest rate, which works out to 260 percent over a year, to be cut in half.
It’s still four and five times higher than Connecticut and Massachusetts, respectively.
Last year, a similar bill died in committee.