Star Tribune Cites Cox on Payday Loans

The Star Tribune cited Prentiss Cox, Associate Professor of Clinical Law, in an article entitled “Payday loans rise online—and so does debt.” The article discusses the potential for hundreds of companies delivering money over the internet to bypass state laws on payday loans. Minnesota law limits payday loans to $350 and caps the interest rate at about 200 percent annually, or $23 on a loan of $300, whereas internet lenders grant loans as high as $1,000 and may charge interest rates of more than 1,000 percent annually, or $93 every two weeks on a $500 loan. According to Cox, payday companies that loan money to Minnesota residents should comply with state law regulating payday loans because use of the internet does not exempt lenders from adhering to state law regulating payday loans.