Rhode Island lawmakers are considering a bill that would revise existing rules on payday loans. The short-term loans are limited to $500, must be paid back in two weeks, and carry interest rates as steep as 280 percent. The proposal, sponsored by Rep. Frank Ferri (D-Warwick), would cap interest at 36 percent and force payday lenders to follow the same rules as other lenders. The House Finance Committee held the measure for further study.
Ferri is sponsoring the bill for the fourth year in a row. It has gained support from groups such as the Rhode Island AFL-CIO, the Rhode Island Coalition for the Homeless, AARP Rhode Island, and the Rhode Island Payday Lending Coalition. It also has received push-back, however, from payday loan providers that operate in the state.
Rhode Island is one of about 35 states that allow some form of payday lending. State law currently lets lenders charge up to $10 in fees for every $100 borrowed.