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Activists storm payday lending store Demand they stop charging high interest rates Peter Marcus, DDN Staff Writer Thursday, March 18, 2010
BLASTING PAYDAY LOANS — Rev. Patrick Demmer, left, speaks at a protest at ACE Cash Express at 3rd and Broadway yesterday. Denver, Daily News photo by Peter Marcus.

Progressive activists and church leaders stormed into a payday lending store on Broadway yesterday and demanded that the lender stop charging interest as high as 521 percent.

Marching inside the ACE Cash Express store at 3rd and Broadway, surrounded by bulletproof glass windows that separated the small group of activists from the store employees, the message was clear: “Predatory lender, criminal offender.”

“It is against God, it is immoral Ń we do not like it,” Rev. Patrick Demmer, senior pastor of Graham Memorial Church of God and Christ, shouted inside the payday lending shop, staring directly at employees sitting behind the bulletproof glass who threatened to call the police on the activist group.

The group marched in support of House Bill 1351, a referred measure sponsored by Rep. Mark Ferrandino, D-Denver, that would cap payday loan rates at a 36 percent interest rate. The measure, which has failed in the past, is currently making its way through the House.

Payday loans are small loans of up to $500 that are secured by the borrower’s personal check. The entire loan plus the fee is due in two weeks, which some borrowers have a hard time paying back. The average payday loan rate is 318 percent with a maximum allowable rate of 521 percent. Supporters of HB 1351 say such interest rates lock borrowers into an unbreakable cycle of debt.

“This is a huge gross cycle,” said Mercy Salazar, who spoke of falling into a cycle of debt after taking out a $500 payday loan to repair her car. “There is a payday loan store in front of every bus stop and all up and down Colfax. I believe people are already working really hard for their money are being taken advantage of.”

Before the group of activists stormed into his payday lending store on Broadway, manager Joseph Cherry told the Denver Daily News that for many of his customers, payday lending is a necessary avenue for them to explore.

“A lot of people need this service,” he said. “Most of the people are responsible, they pay it back and don’t get caught in a habitual cycle.”

Cherry also points out that Colorado law already requires payday lenders to offer payment plans to customers, offering as many as six payments, which he said payday lenders make very little money off of.

If payday lenders were to be capped at 36 percent, most stores would close and that would result in job loss, said Cherry.

But the activists remained determined yesterday to convince the lender not to charge such high interest rates. They asked the employees to fax a letter to Jay B. Shipowitz, chief executive of ACE Cash Express, asking for his support of HB 1351.

“As faith leaders, we stand with those who are victims of injustice whether few or many,” states the letter. “It is unjust practices of financial systems, based more upon making a profit than a true consumer and community service, that undercut the stability of our communities.”

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