payday loans

Federal legislation has been proposed that would undo payday lending reforms enacted in Colorado and many other states, and it would prevent states from regulating these high-cost loans in the future.

We're happy to say that Attorney General John Suthers has joined 40 other attorneys general in opposing this legislation. The Bell is a member of the Coloradans for Payday Lending Reform coalition, which sent out this release yesterday.

A recent report by the Colorado Attorney General's Office on payday lending provides strong evidence that reforms enacted by the legislature in 2010 are working. Data for the last five months of the year – the period the reforms were in effect – suggest borrowers are paying much lower effective interest rates and are largely avoiding the cycle of debt that trapped many of them under the previous rules.

By Rich Jones
For The Daily Camera

(CORRECTION: A guest opinion provided by the Bell Policy Center on page 7A Tuesday contained an error. The agency reported Tuesday that they were provided erroneous information by the attorney general's office. The opinion stated that "almost half" of payday loan borrowers had 16 or more loans in the previous 12 months. That number should have been 26.56 percent.)

In an editorial last Thursday, the Camera came out against a plan to change payday lending laws in Colorado. It said the legislation is "terrible."

By Marianne Goodland
The Colorado Statesman

Efforts to undo part of last year's payday lending reforms came to an end on Thursday, when the Senate Local Government and Energy Committee voted on a party-line 3-2 vote to shut down House Bill 11-1290.

The Local Government committee was the only one in the Senate without a clear supporter or sponsor of HB 1290, and it was sent the assignment of hearing HB 1290 from the Senate Finance Committee in a surprise move Tuesday.

Rich Jones, Director of Policy and Research
The Bell Policy Center
May 5, 2011

Thank you for the opportunity to speak to you today. I am Rich Jones, the director of policy and research with the Bell Policy Center. The Bell is a non-partisan, non-profit research and advocacy organization dedicated to making Colorado a state of opportunity for all. We have been working for more than four years to reform payday lending in Colorado to ensure that payday loans are a source of credit for low-income borrowers and not a debt trap.

Update on the payday lending bill: The "fix" we wrote about yesterday has switched committees. House Bill 1290 now goes to the Senate Local Government and Energy Committee on Thursday morning. We appreciate your help yesterday, but with this change, we are asking you to contact members of the Local Government Committee. Your voice is important – tell your legislators what you think.

Last year, the Colorado legislature reformed payday lending in Colorado. It was one of the major achievements of the 2010 session, and borrowers are better off today because lawmakers cast an important vote for consumer protection.

Payday lenders fought these efforts and are back this year, trying to undo last year's important work.

The showdown is Tuesday, when HB 1290 will go before the Senate Finance Committee.

Rich Jones, Director of Policy and Research
The Bell Policy Center
March 28, 2011

Thank you for the opportunity to speak to you today. I am Rich Jones, the director of policy and research with the Bell Policy Center. The Bell is a non-partisan, non-profit research and advocacy organization dedicated to making Colorado a state of opportunity for all. We have been working for more than four years to reform payday lending in Colorado to ensure that payday loans are a source of credit for low-income borrowers and not a debt trap.

Last week, in breakneck speed, the House approved a bill that would increase the fees that payday borrowers must pay if they repay their loans early. It creates a financial incentive for payday lenders to churn the accounts and weakens the six month minimum loan term that was at the heart of last year's reforms.

Described by proponents as a "technical" amendment and a "clean-up" to last year's payday lending reform law, House Bill 11-1290 passed out of the Business and Economic Development Committee on a party line vote on March 29 and passed the full House on March 31.

We recently found out the payday lending industry is working with several legislators on a bill to undo the progress we've made improving what were the most dangerous loan products on the market.