PayDay Lending Bill Moves Forward in Senate

June 17, 2013
mortgage lending news

A new, controversial proposal is moving through the Washington state Senate as part of budget legislation. Critics of Senate Bill 5312 say it is an end-around to previous legislation passed to curtail predatory lending practices that cause many consumers to fall into a debt trap. Supporters counter that it would allow payday lenders to make more loans up to $1,500 with more quality interest rates, although rates could still be allowed to reach as much as 200 percent. Installments for loans would be set at 18 months and could cause many borrowers to fall underwater on their debts. Currently, payday lenders in the state are only allowed to lend up to $700, to be repaid on the following payday. Sen. Sharon Nelson argues that the “harmful effects of predatory lending” would offset any jobs that the legislation might help create. However, Sen. Steve Hobbs -- the bill's prime sponsor -- considers the proposal “an attempt to get rid of payday lending and replace it with something better.”
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