Legislature Poised to Pass Payday Lending Rules
02.04.2010 by Elizabeth Ziegler
(KCPW News) Democratic Senator Karen Mayne is following in the footsteps of her late husband, Senator Ed Mayne, in sponsoring payday lending legislation. She says it’s the Legislature’s role to ensure the industry is operating the way it should.
“This is an industry that’s here to stay,” said Mayne. “So our charge is to give it guidance and give it stability to work in our atmosphere.”
A bill Mayne is co-sponsoring with a Republican lawmaker is close to passing out of the Senate, after already clearing the House. It shortens the time limit interest can accrue on short-term loans from 12 weeks to 10. It also allows customers to set up an extended payback plan once a year to pay back the loan in four payments, and establishes reporting criteria for the industry.
However, some say the bill doesn’t go far enough to regulate the booming payday lending industry. Mayne agrees, but says it’s a good place to start.
“Is it everything we want? No. But every time we make good legislation to give guidance to this industry, I think we can feel good about it,” she said.
House Bill 15 won unanimous support on its first vote in the Senate. It faces another vote before it can be sent to the governor to be signed into law.
The payday lending industry has worked with policymakers in 35 states to provide responsible regulation that protects consumers and their access to credit. In a state-regulated environment, payday advances can often be the best choice for consumers.
Hopefully legislators aren’t trying to eventually ban the service. They should recognize that there is a high demand for this kind of short-term credit these days. It’s such a valuable option for people who borrow responsibly and don’t want to use other more expensive alternatives.