After striking out with the Legislature, a community organization hopes to convince a federal official that limits are needed on payday loans.

The Rev. Errol Domingue, pastor of Baton Rouge’s Elm Grove Baptist Church, said Wednesday that changes are needed, even if Louisiana’s legislators disagreed. The only bill to emerge from the legislative session was a payday loan industry-friendly proposal.

“The corrupting influence of lobbyists and campaign contributions prevailed, as it too often does when the interests seeking representation are not those of the wealthy and the powerful, but those of ordinary citizens,” Domingue said during an afternoon news conference. He spoke in front of the stained-glass window at Wesley United Methodist Church in downtown Baton Rouge.

Organizers with Together Louisiana, a grass-roots group of faith and community leaders, will caravan Thursday to New Orleans. Richard Cordray, director of the Consumer Financial Protection Bureau, is holding a field hearing at 10 a.m. on mobile financial services at the Old U.S. Mint. Afterward, Cordray will sit down with Together Louisiana.

Together Louisiana plans to ask Cordray to:

  • Prohibit payday lenders from lending to anyone who has been in debt with payday loans for more than 90 days in a 12-month period.
  • Force payday lenders to determine a borrower’s ability to repay before approving a loan.
  • Require payday lenders to report their transactions to a designated credit bureau or a regulatory authority.

Congress established the bureau several years ago to protect consumers by carrying out federal consumer financial laws. One issue before the bureau is whether new regulations are needed for small-dollar credit markets.

Cordray tackled the topic this week during his semiannual report to Congress. He said loopholes quickly were discovered after efforts were made to protect the military from high-cost lenders.

“The first set of rules that was adopted under the Military Lending Act, about seven or eight years ago, was narrow and allowed those rules to be circumvented by high-cost lenders who continue to operate right outside of military bases or online with lots of patriotic-looking flags and other things, and they’re peddling terrible products to our service members. … It’s exactly the same type of problem we’re going to be dealing with (in the) small-dollar lending market,” he testified.

Commonly called payday loans, short-term borrowing often appeals to people who wouldn’t qualify for assistance at banks or credit unions. The idea is to borrow a small amount of money and pay it back on the next payday. Instead, people often fall into a cycle of visiting multiple lenders and taking out another loan to cover the last one.

Payday loans were a hot topic this legislative session as AARP Louisiana, Together Louisiana and the state’s Catholic bishops clamored for changes. They wanted to lower an annual percentage rate that can exceed 400 percent.

The payday loan industry struck back by hiring lobbyists and successfully killing attempts to cap their fees at 36 percent interest per year and to put a limit on the number of loans per borrower. They said the restriction would put them out of business, depriving consumers of a popular product.

“Payday lending is a perfect storm of unfair lending practices. … And then the payday lending industry hired 55 lobbyists to fight a single reform bill,” Stacy Sauce said at Wednesday’s news conference.

As Sauce and the others spoke, a man sat in a pew and videotaped their remarks before quietly ducking out. Together Louisiana organizers later raised suspicions that the man is tied to the payday loan industry.

Follow Michelle Millhollon on Twitter, @mmillhollon. For more coverage of Louisiana government and politics, follow our Politics Blog at