COLUMBIA — Stacy Applebee said she used to cry while working at a Columbia payday loan store two years ago.
She was one of a handful of speakers Monday night at a hearing on payday loan reform at the Columbia Public Library that was hosted by state Rep. Mary Still, D-Columbia. Applebee spoke about the stresses of working at a payday loan business.
"I'm not proud of things I had to do, but I needed money for family," Applebee said at the hearing.
She said that when a customer was late paying their loan she would have to call them at least three times a day. She also told the audience, which included Still, state Reps. John Burnett, D-Kansas City; Stephen Webber, D-Columbia; Charlie Norr, D-Springfield; and Chris Kelly, D-Columbia, that working at the business was an "awful experience."
Still said that she wants to make changes to the payday loan industry in Missouri and that Monday's hearing was a part of her effort to further regulate the state's payday loan businesses.
She sponsored a bill during the 2009 legislative session that aimed to limit the fees and interest payday lenders could charge. The bill wasn't assigned a hearing until the last day of the session and never came up for debate.
"I guess I learned what they do when they don't want you to have a hearing," Still said Monday night.
Still said the bill she sponsored mirrored a piece of federal legislation sponsored by former U.S. Sen. Jim Talent, R-Mo., that called for interest rate limits of 36 percent with no loan renewals. One difference between the bills was that Talent's was aimed specifically at military families, while Still's applied to all Missouri residents.
The bill she proposed in 2009 would have capped interest rates at 75 percent of the principal loan amount.
She said that Monday's hearing may help her write a better bill that she hopes will come up for debate during the 2010 legislative session.
"I want to look at a little bit different way to write the bill — and it will be similar to last year — but I think we probably even need more regulation than I understood last year," Still said.
Many people with different backgrounds called for payday loan reform at the hearing — among them professors and religious leaders. Problems with high interest rates and multiple loan renewals were among the points raised. Another issue that was repeatedly brought up was whether people who use payday loans are making an informed decision.
Lobbyist Randy Scherr spoke on behalf of the United Payday Lenders of Missouri, which he said represents between 300 and 350 payday loan businesses within the state. He said that his organization has a "very savvy borrower."
"There were 2.8 million payday loans taken out in Missouri because people have found them to be convenient and cheaper than the alternatives," Scherr said, citing data from Oct. 1, 2007, to Sept. 30.
Scherr also said that payday loans often have lower interest rates than loans taken out at banks, bounced check fees and overdraft fees.
Still did not agree with his description of payday loan customers.
"I think it is absurd for the industry to come in and say these are savvy consumers," Still said following the hearing. "Clearly that is not the case, so it was just galling to hear it described that way."
Caira Dean, who works for the Columbia Housing Authority, argued that payday loan customers are uninformed as well.
Dean said that education in how payday loans function is lacking. She teaches Money Smart, a 10-week class on basic financial functions, and said that program participants are not fully-educated in the nature of payday loans.
"People feel like payday loans are their only option of getting out of a tight financial situation," Dean said.