There have been several articles discussing how nursing homes in Missouri take advantage of their employees by lending them money with exorbitant interest rates.  More than 90 nursing homes in Missouri regularly make payday loans to their employees at high interest rates, a St. Louis Better Business Bureau study released shows. The state allows lenders to charge up to a 1,950 percent annual percentage rate (APR) on two-week payday loans, the highest allowed among the 43 states that have either banned or set APR caps on payday loans.  Unlike other payday loan operations, the lender can deduct borrowed money directly from the paychecks of nursing home workers.  The arrangement seems to be unique to Missouri. Officials at the national trade association for payday lenders, as well as advocacy groups who oppose them, say they are unaware of payday shops in nursing homes elsewhere. The payday lenders in the Missouri homes do not lend to the nursing home residents.

Officials at the nursing homes told the BBB that payday loans were made to employees and that the loan amount plus interest and fees were deducted from the employees’ next paychecks. In 2006, then-Gov. Matt Blunt said nursing homes would no longer be allowed to make payday loans to their employees but the nursing homes are still doing it.

The study also found that Missouri’s lax laws have attracted several out-of-state lenders, including 34 online payday loan companies, and that the average cost of payday loans to borrowers with five or more loans in Missouri is $317 million, second only to California.

"They’re really enslaving employees this way. It’s possible that an employee doesn’t get a paycheck" because they owe too much in loans, said BBB spokesman Chris Thetford.


Leave a Reply

Your email address will not be published. Required fields are marked *

Post Navigation