The new law governing payday loans takes effect today. It represents a significant change and should eliminate the two-week, triple-digit loans that trapped so many borrowers. Borrowers will save as much as 63 percent over the maximum charges allowed previously.
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.
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.