House Bill 1351, the payday lending reform bill, passed out of the Senate today. That's a critical milestone. We are closer than ever before to removing from the market a dangerous product that more often than not hurts those it is supposed to help.
House Bill 1351 -- the payday lending reform bill -- passed its first vote in the full House.
The bill has been amended since its introduction, but we think the revised legislation retains important protections for hard-working Coloradans who turn to these high-interest loans.
Amendments allow for an interest rate cap of 45 percent, the state's criminal usury rate, and a one-time annual origination fee of $50. This is similar to the payday reform bill that passed the House in 2008.
House Bill 10-1400: Concerning refund-anticipation loans and requiring facilitators to register as electronic return originators
Rich Jones Director of policy and research, The Bell Policy Center
April 14, 2010
Thank you for the opportunity to submit this testimony to the Business Affairs and Labor Committee. The Bell is a non-partisan, non-profit research and advocacy organization dedicated to making Colorado a state of opportunity for all.
With the legislative session just past the halfway point, we wanted to update you on several bills we are working on – bills that will help increase opportunity for Coloradans. To date, Bell staff members have testified and/or submitted Opportunity Notes or letters 21 times on a broad range of legislation.
Payday loans are being debated at the Colorado Legislature – again.
The difference this time is that lawmakers are being asked to put the question to voters – to let them decide if these loans should be subject to Colorado's 36 percent interest rate cap, which applies to all other lenders.
We at the Bell have been working for several years to reform payday lending in Colorado. We can talk about the problem in terms of interest rates and fees, the average number of loans or the prevalence of same-day-as-payoff loans. Yes, we know the numbers and all the statistics.
But we never forget the real reason we are trying to change this law: These loans are predatory products, and they hurt people. And it's not just the borrowers who get hurt -- the rest of us pay a price and our economy suffers when people are deprived of the opportunity to succeed.
Payday Loans Bad for the State. Therefore, They Aren't Good for Residents
ColoradoPols By The Bell
It was good to hear House Minority Leader Mike May say that payday loans are not the recipe for financial security.
Yesterday, he said that the state "cannot continue to use payday-loan-like policies" in trying to fix the state's budget mess. We hope he shows the same concern for thousands of hard-working Coloradans who face their own financial crisis because of predatory payday loans.