Payday borrowers scored a major victory Tuesday when the Colorado Attorney General's Office revised rules for implementing the payday lending law adopted this past legislative session (HB 10-1351). The new rules state that all charges and fees, including the origination fee, must be refunded on a pro-rata basis if a loan is paid off early. A previous version of the rules stated that the origination fee was not refundable.
DENVER – A Democratic candidate for attorney general has charged that the payday lending industry might be improperly influencing rules for the high-interest loans.
Attorney general candidate Stan Garnett says campaign contributions to incumbent John Suthers, a Republican, are suspicious because they happened while Suthers' office is writing new rules for the industry.
"Coincidence? You decide, and then decide who you want as your attorney general," Garnett said in an online video he released Thursday.
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.
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.
HB 06-1351 represents an opportunity gain for Colorado. HB 1351 extends the Teen Pregnancy and Dropout Prevention program. This is a comprehensive, community-based program serving Medicaid-eligible teen boys and girls who are at risk of early parenting.