Crackdown On Payday Loans

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Crackdown On Payday Loans

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Posted: 4:50 PM Mar 26, 2008
Last Updated: 6:58 PM Mar 26, 2008
Reporter: Mindy Stone
Email Address: mstone@kktv11news.com

3 comments

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A bill before the Colorado Legislature would cap the interest rate payday lending businesses can charge. The loan companies can currently charge more than 500 percent interest on a payday loan. They also can let borrowers take out more loans, even if they haven't paid back the first one.

"The legislation going through Denver is designed to eliminate these outrageous interest rates compounded by outrageous collection procedures. They're really taking advantage of people who don't understand what's happening," said Certified Financial Advisor Craig Carnick.

House Bill 1310, sponsored in the senate by President Peter Groff (D-Denver) would cap annual interest rates on payday loans at 45 percent. It would also allow lenders to charge no more than a one-time $60 finance fee per borrower per year.

A senate subcommittee modified the bill this week. If the full senate approves this new version, it will go to the house for final approval.

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Comments are posted from viewers like you and do not always reflect the views of this station.

Posted by: grantalupous Location: denver on Apr 10, 2008 at 03:22 PM
Industry critics claim that payday lending “costs” American families $4.2 billion in fees. Let’s put it in perspective. In 2006, consumers spent $4.2 billion in ATM service charges to withdraw their own money. They paid an estimated $22 billion in NSF fees to banks and credit unions and banks collected an estimated $10.3 billion for overdraft protection services. Businesses charged an estimated $57 billion in late bill payment fees (more than 140 percent of the total estimated payday lending volume in the U.S.). And credit card interest cost consumers more than $87 billion. These politicians are just trying to make a name for themselves. They know that they are playing a popularity game. Our country has set up our political system like the home coming parade of a highschool and it is really stupid. We should leave the payday loan centers alone and these politicians should work on the education of this country! Then they could educate people on how to manage their money wisely.

Posted by: Anonymous on Mar 28, 2008 at 06:25 AM
Thank you shantell for that comment. I am wrapped up in 3 of them right now. I pay 340.00 bucks a month for this.. I originally struggle pay day to pay day and this is killing me.. I am almost done paying off two of them.. thank goodness. but this is absolutly killing me..

Posted by: Shantell Location: Fremont County on Mar 27, 2008 at 11:07 AM
I am glad to see that this issue is taking notice. I ave seen many people, including my family get wrapped up in getting a loan for emergencies and having it (loan) be carried on for months. It is a scam and yes, it helps when you need cash, but watching hard working people become a slave to these places is very depressing. It is a revolving door and zaps peoples paycheck. These places thrive off hard working peole who dont make a lot of money, already struggling in this messed up economy.Granted, the money helps when your paycheck is short, but the interest rate is pure robbery.

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