As Wyoming weathers the economic downturn, one business sector is seeing significant growth: payday lending. Marc Homer with Wyoming Kids Count says the amount loaned has risen 10 years in a row, and is up 15 percent in a year.
His group's concern with the rise is that the lenders target working families with children in the state's poorest neighborhoods, as Homer discovered while mapping loan shop locations.
Payday lenders say they offer a needed financial product to high-risk borrowers shunned by banks. Homer says families in a financial pinch need better options.
Homer said that he would like Wyoming to join a number of states that are regulating the industry by capping interest and fees, and limiting the number of loans per year, as well helping establish partnerships with credit unions to offer short-term small loans.
The Wyoming Department of Audit reports that the average annual A-P-R for payday loans is 521 percent, and the typical payday borrower pays back 793 dollars for an initial loan of 325 dollars. The total amount of money loaned through the shops last year was almost 92 million dollars.