Payday Loans In Colorado And The Threat Of HB 1351

Various state legislatures have passed tough payday loans regulation in recent months, and now Colorado HB 1351 has made it through after a narrow vote. HB 1351 caps APR at 45 percent and requires that lenders give borrowers as long as six months to pay back the money borrowed according to Progressive States Network. Because payday loans are commonly a two-week short term loan, the interest a lender would end up getting from extending a loan at an annual interest of 45 percent would end up being not much more than the $ 4.14 a lender charging a 36 percent APR would receive. Thirty-six percent is a cap that many states typically have placed on payday lending, and it isn't feasible for payday lenders. According to Progressive States, the only way Colorado lenders could even begin to cover their own costs would be the leeway to charge a $ 75 origination fee and monthly fees of up to $ 30 in excess of interest.

Crying no on HB 1351?

Those who said HB 1351 is bad for jobs and the economy were Colorado Financial Service Centers Association and the community Financial Service Association (CFSA). The organizations cited examples of how recent tax hikes and regulations in Colorado have cost the state jobs (such as 5,000 Amazon.com jobs that were lost) in a TV stop. 1600 jobs are claimed to be lost in Colorado in the payday loan industry alone by HB 1351. Not only that, but the legislation that the Boulder Daily Camera called "a terrible bill" in February is supported by groups that would appear to be the "targets" of the payday loans industry, if the rhetoric of the Center for Responsible Lending is to be believed. Among others, the groups include C3 – Colorado Competitive Council, the Hispanic Contractors of Colorado, Society of Hispanic Human Resource Professionals and Urban League of Metro Denver.

Financial Meltdown was caused by Wall Street madness

Some organizations with a lot of money are claiming it was the payday loan industry that is to blame because of a consumer’s ability to roll over loans. What the vast majority of all of this criticism forgets is the fact that not only do the most visible payday loans companies nationwide either prohibit or severely limit rollovers, the CFSA makes a point of working with the vast majority of lenders who do put consumer protections of this sort in place. Consumers really just don't need Colorado HB-1351, Illinois’ HB 537, Ohio's HB209, Oregon’s SB 993, New Hampshire's SB 193 or Iowa's HF 2127, to name a few. Consumers like making their own choices rather than having a nanny around to bother them.

Sources for the article

Colorado HB 1351

http://www.leg.state.co.us/CLICS/CLICS2010A/csl.nsf/fsbillcont3/041577DBD253C4C9872576D20063325F?Open&file=1351_ren.pdf

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This entry was posted on Friday, May 21st, 2010 at 5:38 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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