A Kansan who takes out a $500 payday loan could end up paying back more than $2,000 during the course of a year. With limited regulation, lenders can charge up to 391% interest on loans.

A Kansan who would take such an offer is likely short on cash and options. Should lenders be able to charge such exorbitant interest rates? Some states have capped rates at reasonable levels, and Kansas should do the same.

We must remember the lessons learned from the financial crisis, when irresponsible lending triggered wide-ranging economic consequences. The private market can solve many problems, but when businesses go too far in making a profit at the cost of exploiting people, the government should take action.

The consequences of irresponsible lending rarely end with the borrower. A borrower trapped in a cycle of high-interest loans risks a domino effect of financial problems — overdraft charges, losing a car, being unable to get to work, difficulty affording health care, and bankruptcy. It is in the best interests of all Kansans to make sure lenders act responsibly.

A new coalition of nonprofit organizations is pushing for restrictions on payday lending in the upcoming legislative session. Kansans for Payday Loan Reform includes 18 groups, including Catholic Charities, whose Kansas Loan Pool Project is one of the best programs for helping people stuck in debt. The program partners with banks to get borrowers low-interest, fixed-rate loans with reasonable payment plans, plus financial coaching.

The program has helped thousands of Kansans pay debt, but the problem is still substantial. More than 175,000 Kansans use payday loans every year, according to Kansans for Payday Loan Reform, and most remain in debt far longer than intended, resulting in substantial fees and additional charges.

The Center for Responsible Lending, a national advocacy group, reports Kansans pay more than $65 million in fees for payday loans annually, 75% of which is generated by borrowers with more than 10 loans per year. Frequent borrowers, who pay off loans with additional loans, are a major source of concern. Trapped in debt and racking up fees, borrowers find themselves with few options for financial independence.

Fifteen states have passed interest rate caps, typically at 36%. Although there is a need for more small-scale lending, borrowers in the states with interest rate caps are finding options. It is time for Kansas to take action to protect borrowers and the economic health of our state.