Akaka takes aim at ‘payday loans’

United States Sen. Daniel K. Akaka, D-Hawai‘i, announced that several hundred people attended a recent, free forum he co-sponsored to help Kaua‘i residents better understand investing in security.

The state Department of Commerce and Consumer Affairs, National Association of Securities Dealers (NASD) Investor Education Foundation, and Hawaii Council on Economic Education co-sponsored the free Kaua‘i forum, at the Kaua‘i Marriott Resort & Beach Club, and a similar gathering in Hilo on the Big Island.

As the ranking Democrat on the Readiness Subcommittee in Armed Services, Akaka also recently launched a comprehensive financial-education campaign, he said in a press release.

Sponsored by the NASD Investor Education Foundation in cooperation with the Department of Defense, the campaign is designed to help military personnel and their families, and others, manage their money with confidence.

Akaka is launching the first of such programs that will be conducted across the country.

One of the topics covered will be “payday loans.” Payday loan amounts are usually in the range of $100 to $500, with payment in full due within two weeks, as ways of tiding people over in between paychecks.

Finance charges on payday loans are typically in the range of $15 to $30 per $100 borrowed, which translates into triple-digit interest rates in the range of 390 percent to 780 percent when expressed as an annual percentage rate.

This situation often creates a cycle of debt that is hard to break.

“Payday lending is rampant in the military,” said Akaka. “One in five service members have used payday lenders in the last year, according to the report, ‘Payday Lenders Target the Military,’ by the Center for Responsible Lending.” The campaign aims to teach people how to better manage their money so that they won’t need to depend on the services of the payday-loan services.

On Kaua‘i, the offices of places like PayDayHawaii, in Kukui Grove Center and Waipouli Plaza, do brisk business even without a large military presence on this island.

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