EL PASO COUNTY, Colo. (KKTV) - Colorado voters are being asked to make a decision on payday loans in the upcoming election.
Proposition 111 sets a cap on the interest rate on those short-term loans.
It also eliminates any other fees besides that interest rate.
You can imagine how getting a short-term loan with a huge interest rate and initial fees could end up backfiring, putting the borrower in a bigger and bigger hole.
Supporters of 111 say these loans are predatory and people need to be protected.
Opponents say this is unnecessary babysitting, and it's going to eliminate the option for these short-term loans altogether.
At a rally Tuesday morning, a group of veterans said our servicemen and women are especially targeted by payday locations.
After a borrower receives the loan, they can go from a hard place to a harder place.
"I support good business, but this is a business that is doing bad business practices and prying on people who are already down on their luck," Democratic Rep. Tony Exum Sr. explained in support of 111.
The move limits how much someone pays to borrow. If the bill passes, the annual percentage rate, or APR, is capped at 36 percent and eliminates any lending fees or charges.
"We need to get this passed, then talk about if 36 percent is reasonable, but 200 percent is outrageous." Rep. Exum Sr. added.
While some claim the current APR cap is outrageous, an opponent to 111 says it's our right to make the decision on our own.
"So the reason the interest rates are so ridiculously high is these are people with terrible, terrible credit rating and if they are in a position where they need a loan for a week, this is an option," said Jon Caldara, the president of the Independence Institute, in opposition of 111. "It's not a great option, I don't think they should take it, but they should have a choice."
Caldara says if this passes, these payday loan businesses will collapse.
"The idea of Prop 111 is we smart people need to save stupid poor people from their own bad decisions," Caldara said. "So we are going to outlaw the practice of payday loans."
Ballots were mailed out on Monday statewide.
Proposition 111 will read on your ballot as follows:
Shall there be an amendment to the Colorado Revised Statutes concerning limitations on payday lenders, and, in connection therewith, reducing allowable charges on payday loans to an annual percentage rate of no more than thirty-six percent?