Ritter Signs Payday Loans Bill

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Durango Herald 
May 26, 2010
Hanel, Joe

Colorado Gov. Bill Ritter signed House Bill 1351 into law on May 25, effectively replacing short-term, high-interest payday loans with new six- to 12-month terms loans that carry lower interest rates. The legislation's sponsor, Rep. Mark Ferrandino (D-Denver), has been working toward payday lending fixes since he joined the Legislature three years ago; he called this bill "real reform on payday lending." Ritter said the law sends "a powerful message that we will not tolerate exorbitant abuses of so-called payday loans." An industry executive said half of the payday lending companies in Colorado may close as a result of the bill, which requires them to offer a new product and maintain a greater cash flow for extended repayment schedules. HB 1351 requires a minimum six-month repayment plan and caps interest rates at 45 percent, though fees could push borrowing charges above 100 percent of the original loan value.
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