Payday Lending Bill Needs Payday in House to Pass

The Colorado Statesman
March 12, 2010
Goodland, Marianne

Rep. Mark Ferrandino (D-Denver) on March 8 introduced House Bill 1351 in an effort to cap interest rates for payday lenders in the state of Colorado. The proposal restricts payday loan interest rates at 36 percent and asks voters to approve the change in the next election. A bill passed by the Colorado Legislature in 2000 exempted payday lending from usury laws, did not limit the number of payday loans a person could have from multiple lenders, and did not limit the number of times a person could renew a loan. According to Ferrandino, the average person takes out 7.8 loans annually, averaging $369 per loan, with an annual percentage rate of 316 percent; and 50 percent of borrowers take out 12 or more loans per year at one store. The House Judiciary Committee approved Ferrandino's bill on a party line vote of 7-4 after a hearing that included testimonials from borrowers, clergymen who work with low-income consumers, payday lenders, and others. The bill was passed with just one amendment that changed the language regarding the voter referendum and could be up for debate in the full House as early as Friday, March 12.
Web Link