Minnesota's payday loan borrowers have kicked off the new year with a fresh coat of financial protection thanks to a law that went into effect on Jan. 1. Capping short-term loan interest at 36%, the measure is seen as a move to rein in the side effects of desperate lending practices. Minnesotans previously faced interest rates as high as 291% on these loans, a burden that often led to spiraling debt.

Missy Juliette, who sits on the board of Exodus Lending and once found herself ensnared by high-interest loans, knows the relief such legislation can bring. "I thought it would be a one-time fix, a one-time thing, and it was not," Juliette said. After taking out four loans to keep up with her financial struggle, and facing the threat of wage garnishment, programs like Exodus Lending, which helped her out of her situation, have become personal beacons of hope, according to CBS News Minnesota.

The law championed by Senator Judy Seeberger is aimed at preventing people like Juliette from getting trapped in a cycle of debt. Seeberger, vice-chair of the Commerce and Consumer Protection Committee, observed the detrimental pattern among borrowers. "The average number of payday loans that people would have would be six payday loans," she said. "Some people had nine or 15. They end up getting really expensive and getting people stuck in a trap they just can't get out of," as reported by CBS News Minnesota. 

The new regulations bring down the previous average interest rate of 202%, and aim to address predatory lending and its impacts on those facing financial hardship. "We are reducing barriers and obstacles for Minnesotans to help them recover from financial hardship and move towards the financial stability that will help them and, their families succeed," added Seeberger. The expanded access to character-based short-term loan programs, which are interest and fee-free, are an additional tool provided by the legislation to help those with limited access to mainstream financial products, as per Minnesota Senate DFL.