Bill would loosen limits on payday loan lenders

By | February 19, 2013 | Comments

Lawmakers on Tuesday heard testimony on a bill that would loosen restriction the Legislature placed on payday loan lenders in 2010.

House Bill 1658 would lift the cap on the total number of small loans a borrower may have in a one-year period, from eight to 12.

Supporters of the bill say limits placed on payday lenders in 2010 have hurt consumers, forcing them to seek loans from unregulated and risky internet-based lenders.

“I don’t see the harm. Since we put the regulations in place, I don’t see how it’s possible to get yourself inadvertently put into a cycle of revolving debt,” said the bill’s sponsor, Rep. Steve Kirby (D-Tacoma). “I don’t understand why this is such a boogeyman.”

Opponents say the limit on loans has reduced the debt load that overwhelms the state’s poorest residents.

Marcy Bowers with the Statewide Poverty Action Council told the House Business and Financial Services Committee many people take out new loans to cover the repayment of previous loans.

“The eight- loan limit works as a circuit breaker for the cycle of debt,” she said.

The committee did not take action on the bill.

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