Payday Loan Regulation Passes House

There have been similar bills that have all failed this session.

 

But this one has found success in compromise. 

Lawmakers say creating a database will help the state monitor loans and make it a crime to lend once people have reached the limit. 

 

Currently, the law says you can only take out 500 dollars at a time, but without a database, there’s no way to check.

 

“Hopefully within a year or two we’re going to have real significant data to show us how many people use payday loans, how many get multiple loans, how long does it take them to pay it off. But this is going to help a lot of people not end up in bankruptcy,” said the bill’s sponsor Rep. Patricia Todd.

 

Todd’s bill originally set a cap for interest rates, which can sometimes reach more than 400 percent, but she says the bill wouldn’t have stood a chance.

 

Barbara Johnson had her own trouble with payday loans. After taking out a small loan, she went on extended sick leave, eventually crippling her with a debt she couldn’t pay. 

 

“You’re only going to get further behind using the system because 87 dollars every two weeks on 500 dollars, that is a high percentage rate that you’re paying back,” said Johnson.

 

She also found out that someone else was taking out loans in her name, leading to almost two thousand dollars of debt. She says she’s happy the state is trying to do something to help.

 

“Then maybe what happened to me cannot happen to anybody else. Because at least they’ll see the loans out there if they have a loan. But there’s still a lot more that needs to be done,” said Johnson.

 

The bill still has to go through the senate before it can make it to the governor’s desk.