House takes drastic action to benefit payday lending industry
Yesterday, the House of Representatives took a risky and highly unusual step to weaken 2010's payday lending reforms and raise rates on Colorado borrowers.
The House did this by amending the annual rules-review bill – procedural legislation that implements hundreds of state agency rules and regulations.
We need your help now. Please call your senators and tell them to reject the House's amendment and to stand by the version of Senate Bill 78 as originally passed. You can find a list of all senators here.
This drastic, last-minute action essentially puts the interests of the payday lending industry ahead of low- to middle-income Coloradans, who now face the prospect of higher fees. In fact, it puts the interests of the industry ahead of almost all Coloradans by holding hostage nearly 600 rules and regulations that cannot take effect without passage of this bill.
Each year the legislature's legal services staff and Legal Services Committee (LSC) review all new rules to make sure agencies have statutory authority to issue them.
During this year's rules-review process, neither the staff nor members of the LSC raised concerns about the attorney general's rule.
However, payday lending supporters in the House ambushed the process by amending the rules-review bill. The amendment would repeal the attorney general's rule directing payday lenders to refund all fees on a pro-rated basis if a loan is paid off early. Eliminating this rule raises the costs to hard-working Coloradans who pay off their loans early and creates an incentive for payday lenders to churn the loans.
This was the goal of House Bill 1290, which was defeated last week in the Senate.
The Senate must agree to the amendment if it is to become effective. To protect last year's hard-earned payday lending reforms, we ask senators to reject the House's attempt to hijack the rules-review bill.
For more information about what happened last night, check out the
article by Tim Hoover in The Denver Post.