House backs bill on payday lending
2/22/2008 - 3:47pm
The House gave initial approval today to legislation restricting the payday lending industry in Colorado.
The proposal would cap annual interest rates for short-term lenders at 45 percent, the same as bank loans.
Payday lenders argue the interest cap on short-term, fast-cash loans would put them out of business. But supporters of the bill say the industry is preying on people who are struggling financially by ripping them off with high finance charges.
The bill faces a final vote in the House, which could come as soon as Monday. It would then go to the Senate.
The House also gave initial approval today to legislation that would allow art galleries to give away wine on special occasions.
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HB 1310 bad for Colorado
House Bill 1310 is a bad bill for Colorado. It's easy to pile on the payday lending industry because so few people actually understand how their industry works. The finance charges look high, but when faced with an economy that has no payday lending, the consequences are much worse.
For a glimpse of what borrowing could be like in Colorado without the payday lending industry, read through this report. I had my doubts about the industry at first like a lot of people, but this report convinced me: http://www.newyorkfed.org/research/staff_reports/sr309.html
I hope legislators have enough good sense to vote this bill down.