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March 26, 2008 08:41 PM UTC

Payday Lending Reform Looks Likely to Pass

  • 14 Comments
  • by: Colorado Pols

As the Denver Post reports:

The Senate gave initial approval Tuesday to a bill tightening regulations on payday loans despite Republican objections that it was “economic paternalism.”

Supporters of House Bill 1310, which would cap interest rates on payday loans at 45 percent and limit other fees on the transactions, said the legislation would protect consumers.

“The practice we’re talking about is usury,” said Senate President Peter Groff, D-Denver. “Going back to biblical times, governments have tried to deal with this immoral practice.

“It was wrong back in biblical times, and it’s wrong today.”

But Sen. Shawn Mitchell, R-Broomfield, and other Republicans said the bill ultimately would hurt consumers by limiting their borrowing options.

He said the bill was “economic paternalism” on the part of government.

The bill also prohibits short-term lenders from knowingly lending money to someone who already has a payday loan, though it’s unclear how lenders might know that.

Sen. Moe Keller, D-Wheat Ridge, said that provision is needed because too many payday borrowers extend their loans time and time again or take out multiple loans, spiraling further into debt. “Then it’s no longer a choice, it’s a trap,” Keller said.

We discussed previously how this bill has emerged as the hot-button issue of the legislative session, with intense lobbying against passage by the payday lending industry and Republicans uniformly crying shame. Despite that opposition, it’s done well and survived the process relatively intact. We’ve heard Governor Ritter will sign the bill if it reaches his desk, which looks increasingly likely.

Comments

14 thoughts on “Payday Lending Reform Looks Likely to Pass

  1. First off, kudos to those that voted for this – you did the right thing in the face of intense lobbying. You should all feel good about voting for this.

    Second, to the Republicans bending over for a business interest:

    But Sen. Shawn Mitchell, R-Broomfield, and other Republicans said the bill ultimately would hurt consumers by limiting their borrowing options.

    Does this mean you support the poor selling a spare kidney of they need that as a borrowing option? Or for poor women to engage in prostitution – again a borrowing option?

    1.    But God forbid she sell or donate her eggs!  Or rent out her uterus!

        It’s sometimes hard to tell where they draw the line on free enterprise.

  2. So I don’t know too much about it, or what kind of regulation it is imposing…

    But I would never go to those places.  And I tell everyone I know who is considering that option to be very careful.

    If you can play by their rules, it can be helpful.  But if you can’t, you get screwed in a major way.

  3. Supporters of House Bill 1310, which would cap interest rates on payday loans at 45 percent and limit other fees on the transactions, said the legislation would protect consumers.

    These loans must target the literate and the blind.

    1. If you give up, then I have to pay even more………

      Hell, on second thought, maybe I’ll join you.

      I could use some time away from the same shit hole job I’ve had since 1984. I could stand to let someone else pay my way for awhile…. :)~~~~~

    2. Colorado required voter approval for (1) tax increases, (2) revenue increases (one such increase was recently approved by voters), and (3) increased debt obligations that would unbalance the budget, at both the state level and the local level (although many local governments have voted to “debruce” and eliminate restriction number (2) above).

    1. is not from Andrew Oh-Willeke who posts at Colorado Pols as “ohwilleke” despite the fact that I have a long standing blog (with an unfinished science fiction novel on it) entitled “Wash Park Poet” in addition to my “Wash Park Prophet” blog which receives heavier traffic.

      I personally would prefer it if the person using that handle refrained from using the WashParkPoet descriptor in the future to avoid confusion, but I am not threatening any form of legal action, nor do I intend to bring it up with the Colorado Pols proprietors, as I have better ways to spend my time, if the person posting in this way is really obstinant about the matter.

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