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Updated: 6:58 PM Mar 26, 2008
Crackdown On Payday Loans
A bill before the Colorado Legislature would cap the interest rate payday lending businesses can charge. Posted: 4:50 PM Mar 26, 2008Reporter: Mindy Stone Email Address: mstone@kktv11news.com |
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4 Comments 
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.
Latest Comments
Sure it sounds great to cap the interest rates that Payday Loan companies can charge. But what happens when they are forced out of business, who will help consumers then? The biggest problems occur when people are trying to pass off the blame, if you have bad credit, a poor job and few financial resources available to you where can you really turn? A normal bank certainly won't help you, neither will a typical credit card cash advance when you don't even qualify for a credit card. Someone has to be willing to help consumers who are stuck in a bind, and sadly most people forget that Payday Loan lenders are at least offering help to those that other businesses and financial companies have tried to forget about.
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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.
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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..
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