Louisville, KY – As a result of CLOUT’s work, Mayor Jerry Abramson agreed to convene local banks and credit unions to develop an initiative to offer more affordable and accessible products and services to reach out to the 29,000 unbanked households in the Louisville area (i.e., families without a checking or savings account and are likely to pay high transaction fees for services like check cashing or exorbitant interest on loans). The “Bank On Louisville” initiative was officially launched in July 2010. There are sixteen financial institutions participating. Since its launch, over 16,000 persons have opened new accounts, with an average balance of $853 and with 91% of the accounts remaining open.
CLOUT is also working to secure a statewide interest rate cap of 36% on payday loans, which currently charge approximately 400% APR in Kentucky. Payday loans are small, short-term loans that are intended to cover a borrower’s expenses until his/her next payday, but regularly become a “debt trap” in which the borrower has to repeatedly renew the loan and pay associated fees every two weeks or take out loans to cover interest on previous loans. CLOUT has assisted in the development of the Kentucky Coalition for Responsible Lending, a diverse coalition of over 60 organizations across the state who support a rate cap.