A version of this column originally appeared in The Alpena News.
Payday loans are marketed as a quick way to address an unexpected expense, but far too often they trap individuals who are already financially vulnerable in a vicious cycle of perpetual debt due to their short repayment periods and the high fees that come with them.
In fact, here in Michigan and in several other states, payday loan fees often exceed an annual percentage rate (APR) of 340%, making it extremely difficult, if not impossible, for the people who need them to pay them off in time. To put that into perspective, according to U.S. News & World Report, the average APR for credit cards in the U.S. was 20.09% as of February 2023 and the average APR for a new car loan for buyers with an average credit score was 14.9% in August 2023.
Thankfully, legislation was reintroduced last week by Sen. Sarah Anthony and Rep. Abraham Aiyash (Senate Bill 632 and House Bill 5290) that would place a 36% cap on payday lending rates in Michigan, inclusive of all fees. As a longtime supporter of payday lending reform in Michigan, the Michigan League for Public Policy has stepped up to support this legislation as it would go a long way in protecting Michigan workers and families from predatory lending practices.
As it stands today, Michigan’s triple-digit payday loan rates often result in missed payments, which can then lead to a non-sufficient funds fee from a customer’s financial institution and potentially a returned check fee from their lender on top of what is already owed. It can also result in damage to an individual’s credit score if the loan is ultimately sent to a collection agency, limiting their access to loans with lower interest rates in the future.
What’s even more problematic is that individuals will often resort to taking out a second payday loan to pay off their first loan or immediately after paying off their first loan in order to get by and keep collections at bay. In fact, according to the Community Economic Development Association of Michigan, payday borrowers in Michigan take out an average of 10 loans per year and 70% reborrow the same day they pay off their previous loan. This kind of back-to-back borrowing only kicks the can further down the road and is how individuals can end up in a cycle of debt that spans several years.
These kinds of cash traps are also predatory in nature as 77% of payday lending advertisements target communities of color and lenders disproportionately locate stores in rural and low-income areas as well as Black and Latinx communities, where individuals have already faced extraordinary barriers to prosperity due to our country’s long history of systemic racism and discriminatory housing practices.
The bills recently reintroduced by Sen. Anthony and Rep. Aiyash are in line with what almost half of the states in our country have already done to protect their constituencies. In fact, the Center for Responsible Lending recently reported that, as of June 2023, 20 states as well as the District of Columbia had either already passed laws to cap payday lending rates around 36%, inclusive of all fees, or had put measures in place that ensure lenders can’t saddle consumers with interest rates and financing terms that lead to long-term debt traps.
The recently reintroduced bills are also in line with protections that have already been put into place by the United States Department of Defense, which placed a 36% cap on payday loan rates for all active duty military families back in 2006 with the enactment of the Military Lending Act.
It’s time for these kinds of commonsense protections to be extended to all people who call Michigan home, as high-cost, short-term payday loans have caused incredible harm to struggling Michigan workers and families, including community members in Alpena, Alcona, Montmorency and Presque Isle counties where poverty rates are 15%, 16%, 16% and 13% respectively. By taking millions of dollars out of the pockets of Michiganders, payday lenders have significantly hindered their economic self-sufficiency and ability to build assets, resulting in more dependency on food assistance, delayed payments for medical care and rent, missed child support payments and an increased likelihood of bankruptcy. This, in turn, has weakened our state economy and local communities, while placing more strain on existing governmental services.
We applaud Sen. Anthony and Rep. Aiyash for recognizing how unsafe payday loans are in our state and for continuing to fight for the people of Michigan with these bills. We look forward to working with our partners to ensure this legislation reaches the governor’s desk and becomes a law here in our Mitten State.
Jay Cutler joined the League in March 2026 as the Kids Count Senior Data Analyst, where he collects, analyzes, and prepares data for Kids Count in Michigan.
Danielle Taylor-Basemore joined the League as the Development Data and Stewardship Coordinator in June 2025. She brings with her five years of nonprofit experience with a special focus on community engagement, data visualization and strategic programming. Prior to joining the League, Danielle served as the Business District, Safety, and Digital Manager at Jefferson East, Inc.
Scott Preston is a Senior Policy Analyst with the Michigan League for Public Policy, where he leads the organization’s immigration and criminal justice reform portfolios. In the three years prior to joining the League, Scott facilitated the Southeast Michigan Refugee Collaborative and managed a small business economic development program at Global Detroit. His work included launching Michigan’s first Refugee Film Festival and building on a trusted connector model that linked marginalized communities with crucial resources. Scott’s work at the League is informed by his background in journalism and research. He spent four years covering the Syrian refugee crisis in the Middle East for publications such as The Economist, and later worked with unaccompanied refugee minors through Samaritas. Scott holds a master’s degree in international migration and public policy from the London School of Economics and Political Science.
Kate Powers joined the League as the Chief Development Officer in February 2025. Prior to joining the League, Kate held leadership positions at many Michigan nonprofit organizations, most recently serving as the COO and Chief Development Officer of Ele’s Place. Kate has spent the bulk of her career in fundraising, with a short stint in the state Legislature as a legislative aide to members in both chambers. Kate is a graduate of Michigan State University’s James Madison College with a Bachelor of Arts in Social Relations and has a certificate in fundraising management from the Lilly Family School of Philanthropy at Indiana University. Additionally, Kate served on the East Lansing Public Schools Board of Education and is a past President of the Junior League of Lansing. In her free time, she enjoys traveling with her husband and her son and saving outfit of the day and home decor ideas on Pinterest. 
Nicholas Hess joined the League as the Fiscal Policy Analyst in September of 2024. In this role, Nicholas focuses on tax policy, government revenue, and their impact on working families and racial equity, including the effects of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Nicholas values the role that judicious fiscal policy can play in the improvement of people’s lives and the economy, alleviating inequities along the way.
Audrey Matusz joined the League as the Visual Communications Specialist in September 2024. She supports the team with implementing social media strategies and brainstorming creative ways to talk about public policy. She brings with her nearly a decade of experience in producing digital products for evidence-based social justice initiatives. 
Jacob Kaplan 
Donald Stuckey 
Alexandra Stamm 
Amari Fuller
Mikell Frey is a communications professional with a passion for using the art of storytelling to positively impact lives. She strongly believes that positive social change can be inspired by the sharing of data-driven information coupled with the unique perspectives of people from all walks of life across Michigan, especially those who have faced extraordinary barriers. 
Yona Isaacs (she/hers) is an Early Childhood Data Analyst for the Kids Count project. After earning her Bachelor of Science in Biopsychology, Cognition, and Neuroscience at the University of Michigan, she began her career as a research coordinator in pediatric psychiatry using data to understand the impacts of brain activity and genetics on children’s behavior and mental health symptoms. This work prompted an interest in exploring social determinants of health and the role of policy in promoting equitable opportunities for all children, families, and communities. She returned to the University of Michigan to complete her Masters in Social Work focused on Social Policy and Evaluation, during which she interned with the ACLU of Michigan’s policy and legislative team and assisted local nonprofit organizations in creating data and evaluation metrics. She currently serves as a coordinator for the Michigan Center for Youth Justice on a project aiming to increase placement options and enhance cultural competency within the juvenile justice system for LGBTQIA+ youth. Yona is eager to put her data skills to work at the League in support of data-driven policies that advocate for equitable access to healthcare, education, economic security, and opportunity for 0-5 year old children. In her free time, she enjoys tackling DIY house projects and trying new outdoor activities with her dog.
Rachel Richards rejoined the League in December 2020 as the Fiscal Policy Director working on state budget and tax policies. Prior to returning to the League, she served as the Director of Legislative Affairs for the Michigan Department of Treasury, the tax policy analyst and Legislative Director for the Michigan League for Public Policy, and a policy analyst and the Appropriations Coordinator for the Democratic Caucus of the Michigan House of Representatives. She brings with her over a decade of experience in policies focused on economic opportunity, including workforce issues, tax, and state budget.
Simon Marshall-Shah joined the Michigan League for Public Policy as a State Policy Fellow in August 2019. His work focuses on state policy as it relates to the budget, immigration, health care and other League policy priorities. Before joining the League, he worked in Washington, D.C. at the Association for Community Affiliated Plans (ACAP), providing federal policy and advocacy support to nonprofit, Medicaid health plans (Safety Net Health Plans) related to the ACA Marketplaces as well as Quality & Operations.
Renell Weathers, Michigan League for Public Policy (MLPP) Community Engagement Consultant. As community engagement consultant, Renell works with organizations throughout the state in connecting the impact of budget and tax policies to their communities. She is motivated by the belief that all children and adults deserve the opportunity to achieve their dreams regardless of race, ethnicity, religion or economic class.
Emily Jorgensen joined the Michigan League for Public Policy in July 2019. She deeply cares about the well-being of individuals and families and has a great love for Michigan. She is grateful that her position at the League enables her to combine these passions and work to help promote policies that will lead to better opportunities and security for all Michiganders.
Megan Farnsworth joined the League’s staff in December 2022 as Executive Assistant. Megan is driven by work that is personally fulfilling, and feels honored to help support the work of an organization that pushes for more robust programming and opportunities for the residents of our state. She’s excited and motivated to gain overarching knowledge of the policies and agendas that the League supports.
