Payday loan regs pass, ending 4-month impasse

The Senate passed a payday lending bill today, a controversial measure proponents call a compromise, and consumer advocates call disappointing.

The Senate vote for passage, 41-4, broke a four-month long General Assembly impasse.

Sen. Joel Lourie,D-Richland, a co-sponsor of the compromise amendment that broke impasse, said he expects the House of Representatives to accept the Senate version of the bill, without a need for further action.

If that happens, the bill would go downstairs for the governor to sign or veto.

The compromise raises the maximum payday loan amount to $550 from $350, and limits outstanding loans to one at a time by way of a database that will track borrowers.
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Borrowers would have to wait one day between loans, and after consecutive loans a two-day cooling off period would be in effect.

Other provisions of the compromise are that borrowers would have a 24-hour to change their mind on taking out a loan, meaning they could cancel the transaction within 24 hours if they chose.

If borrowers get trapped in a loan they cannot repay, they could enter an extended payment plan, once per year, which would allow their loan repayment to be broken into four equal payment dates.

The bill also calls for an annal review of the database by the state Board of Financial Institutions, which must make a report to the Senate Banking and Insurance Committee and the House Labor, Commerce and Industry Committee.