Sponsors withdraw payday loan bill
Amendment goes too far, they say
By David Milstead, Rocky Mountain News (Contact)
Published April 22, 2008 at 11:55 a.m.
One senator viewed her amendment to payday loan legislation as a compromise. The sponsors decided it was a bill-killer.
Backers of House Bill 1310 said Tuesday they will spike the legislation rather than proceed with the current version of the bill. They're unhappy with an amendment by Sen. Jennifer Veiga, D-Denver, that was added on the Senate floor on March 25.
"Senator Veiga's amendment really went too far in helping the industry," said Rep. Mark Ferrandino, D-Denver. "It wasn't a compromise."
Ferrandino's bill restricted the fees lenders could charge to one loan per customer in a one-year period. It imposed a maximum interest rate of 36 percent, later increased by amendment to 45 percent. And it created a minimum 30-day term for the loans.
Veiga's amendment allowed the fees to apply to every payday loan, not only the first, and reduced the minimum term to seven days.
The Bell Policy Center, a policy group that supported the bill, calculated that the Veiga amendment returned effective interest rates to a range of 350 percent to 566 percent on a 14-day loan. It actually increased the rate on a 14-day, $100 loan, Bell President Wade Buchanan said in an interview in late March.
Veiga said Tuesday she did not intend to kill the bill with her amendment.
"My intention was to preserve an avenue for emergency cash for Coloradans while increasing and enhancing consumer protection," she said. "My amendment was a compromise. . . . I thought it added some great consumer protection, and I'm disappointed I couldn't get the proponents to agree."
For his part, Ferrandino said he'll continue work on the issue with a goal of returning with new legislation next year.
Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.
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April 22, 2008
1:55 p.m.
Suggest removal
Diff writes:
So lets just let the snakes that run this very predatory business, run on with taking advantage of hard working people!
Can't the State legislature get ANYTHING done?
What are we paying them for?!?
April 23, 2008
5:17 a.m.
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roger44 writes:
Seems business owns the politicians for the most part.
April 23, 2008
5:24 a.m.
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badgov writes:
Now now no name calling... That comment seems a little defamatory to me. Bottom line is this bill wouldn't have shut down the so called "predatory business" of payday lending. Fact of the matter is that it was just going to drive all of that payday lending business to the banks, which do not have to play by the same rules put forth by the state. Actually, right now banks can and in many cases do charge higher interest on an advance than the "Snakes" or state legislated payday lenders do.
So Ferrandino, maybe if you are actually elected next year to a seat, you can ask the national banks/ Bell policy group for money and try to create the same legislation next year. Its just too bad that the news never reports the real stories...
April 23, 2008
6:52 a.m.
Suggest removal
holekeeper writes:
Hey these places dont prey on people, people go to them. Sorry, I know I am currently broke, but if your dumb enough to go to one of these places then you deserved to get hosed. we dont need government running every part of our lives, we need people that learn to manage money. Everyone yells about being broke but they still go out to eat, buy booze and drive 3 blocks to 7-11 to buy thier late night soda. If you dont have it dont spend it. If your broke dont take out a loan that will hurt you worse later on shut off the cable and internet and yes you can even go without phone. keep the basics. Water, Power, Home. If you cant afford those three you need to move back in with mom and dad for a while until you become employed again or get a better job. DONT GO TO THE PAYDAY LOAN PLACES! look I solved all of the issues and government didnt need to get involved!
April 23, 2008
7:25 a.m.
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Scott writes:
Yet another example that the crooks own Colorado politicians.
Scott
April 23, 2008
7:35 a.m.
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holekeeper writes:
Scott, you own a politician? that sounds fun!
April 23, 2008
8:14 a.m.
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Brain writes:
If you don't like snakes stay out of their holes!
April 23, 2008
8:51 a.m.
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vudumom writes:
Sounds like someone got a payday loan payoff.
April 23, 2008
9:33 a.m.
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holekeeper writes:
Big Jake how about the little guy look out for the little guy, why do we need government to look out for us on a loan that you as a person must go ask for?
April 23, 2008
11:49 a.m.
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PaydayLendingRepresentative writes:
I echo holekeeper's sentiments.
People are smart enough to make their own financial choices. They don't benefit when government limits their options and squashes competition.
April 30, 2008
3:47 p.m.
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collingra writes:
Politicians shouldn't meddle willy-nilly in financial affairs. The cost of a loan should always be proportionate to the risk a borrower represents. Here we have legislators of the same party quibbling over how to rearrange that equation. Enough already! We’re in enough hot water as it is from political tightening and loosening of the markets.