Pit of Despair Mizzou

Reaching out to help others up: the Pit of Despair in Mizzou

Students at the University of Columbia-Missouri were on high alert over racist threats last week. Naming connections between student debt, predatory lending and structural racism, students and Grass Roots Organizing came out to take on one of the many institutional factors helping to widen the racial wealth gap: the predatory lending industry.

Students and other community members came out to Mizzou to call for a strong Consumer Financial Protection Bureau rule to put an end to loans that are structurally designed to trap people in debt. With these rules, they hope to pull borrowers up from a pit of despair.

The Missouri state legislature suddenly legalized high interest lending in 1991, after years of trying to clamp down on illegal lending practices. By 2010, after decades of state deregulation, there were 2.43 million payday loans in Missouri per year, with an average APR of 444.6%, according to a report from the University of Missouri. It’s no wonder, since there are twice as many payday lending storefronts in the state as there are McDonalds and Starbucks locations combined, and just like these chains, most payday lenders are out-of-state companies.