Washington state lawmakers are preparing to consider Senate Bill 5231, which would permit loans that fall somewhere between short-term payday loans and more traditional long-term installment loans. New loans would have terms ranging from six to 18 months and would be capped at $1,500, with a 36 percent maximum annual interest rate. Critics warn that the “small consumer loan” would become just a new kind of payday-style loan. There are also concerns that the loans could be targeted at military members -- a market that was largely shut down by federal restrictions -- because the new structure would not fall under the Defense Department's definition of a payday loan because they are installment products. Under the proposed legislation, lenders would be able to charge a 15 percent origination fee and monthly maintenance fees of $7.50 per $100 loaned. Marcy Bowers, director of the Statewide Poverty Action Network, says her group has worked with other organizations, including the Center for Responsible Lending, to analyze the cost of a six-month $1,000 loan. Results found that the effective interest rate of a test loan was 218 percent.