MichiganRadio

Court Limits Payday Loan Charges ANN ARBOR, MI (Michigan Radio) - The Michigan Court of Appeals has limited how much payday loan companies can charge borrowers.

Some payday loan companies charge triple damages plus 250 dollars, if a borrower's check bounces.

Candy Wright is with Green Path Debt Solutions, a non-profit counseling company in Detroit. She says the new ruling will help.

"When they know they're living paycheck to paycheck, it gives them a little more comfort of having the ability to know they can get it, but the ability to pay isn't there, so it does bring them lots of trouble," Wright says.

Under state law, people who receive bad checks can charge triple the face value of a returned check, plus court costs of up to 250 dollars.

In 2005, the legislature capped the amount payday lenders can collect for a returned check to the face value, plus 25 dollars.

A trade group challenged a state order demanding that lenders observe the fee limit and won in an Oakland County Court.

The Appeals Court ruling overturns that decision.
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