Killeen Daily Herald: Simulation demonstrates problems with payday lenders
April 13, 2014
BELTON — It was only a role-playing game with no real consequences, but the frustration for those participating in the activity was real.
Helping Hands Ministry in Belton recently held a class on payday lenders, which included a simulation, for some of its clients.
In addition to providing food and clothing to low-income families living in the Belton and Academy school districts, Helping Hands has a benevolence ministry that assists clients in urgent situations in paying for utilities, rent and medications. Those clients are required to take a family finance class and another elective class.
The payday lender class is a project of Helping Hands executive director Rucker Preston, Lauren Serafy and Janae Griffiths. All three are working on their master’s degrees in social work at Baylor University.
“We are by no means experts on this, but we are learning and exploring the effects of payday lenders,” Preston said.
Payday loans typically offer about two weeks of credit, due in full on the borrower’s next payday, at annual interest rates of around 400 percent, according to a report by Pew Charitable Trusts. While borrowers find fast cash to pay rent and other bills, they are often left indebted for months, struggling to repay a loan that was marketed as a short-term solution.
Read more here.