Big push for payday lending reform before lawmakers break for summer


MARK:STATE LAWMAKERS ARE LOOKING INTO TIGHTENING LENDER REQUIREMENTS IN THE PAYDAY LENDING REFORM BILL… 2 NEWS STATEHOUSE REPORTER JASON AUBRY HAS OUR CONTINUING COVERAGE FROM COLUMBUS. ACCORDING TO WHAT HUFFMAN HAS TOLD LAWMAKERS HIS PLAN CALLS FOR THREE THINGS: STRENGTHENIN G CONSUMER PROTECTIONS, TIGHTENING LENDER REQUIREMENTS, AND ENHANCING LOAN SAFEGUARDS.HE WANTS TO HAVE THE LENDERS VERBALLY INFORM THE BORROWER THAT THEY MAY HAVE OTHER OPTIONS AVAILABLE, AND HE SAYS HE WILL CLOSE THE CREDIT SERVICE ORGANIZATION LOOPHOLE ALLOWING THEM TO OPERATE TODAY UNCHECKED.WHEN IT COMES TO TIGHTENING LENDER REQUIREMENTS, HE WANTS LENDERS TO PAY FOR A FINANCIAL LITERACY PROGRAM AND A DATABASE OF WHO HAS TAKEN THE COURSE.HE IS PROPOSING ANOTHER DATABASE FOR ENHANCING LOAN SAFEGUARDS. THAT DATABASE WILL TRACK WHO HAS BORROWED, WHEN THEY DID SO AND FOR HOW MUCH. THAT’S BECAUSE HIS PLAN SETS A MAXIMUM AMOUNT OF PRINCIPAL LOANED TO ONE PERSON AT ANY TIME AT $2,500 – WITH AN UNLIMITED NUMBER OF LOANS TO REACH THAT POINT.FINALLY HIS PLAN WILL NOT ALLOW INTEREST ONLY OR BALLOON PAYMENTS WHERE THE BORROWER COULD HAVE LOW MONTHLY PAYMENTS WITH ONE LARGE PAYMENT AT THE END OF THE TERM.WHILE ALL OF THAT MAY SOUND REASONABLE, HERE’S WHAT THE PEW CHARITABLE TRUSTS — WHO’S MISSION IS TO SERVE THE PUBLIC INTEREST — HAD TO SAY ABOUT THESE PROPOSALS.ALEX HOROWITZ / THE PEW CHARITABLE TRUSTS>”PAYDAY LENDERS HAVE RECOMMENDED THOSE IDEAS BEFORE TO PROVIDE THE ILLUSION OF REFORM WHEN THERE’S BEEN A DEMAND FROM CITIZENS OF A STATE TO REIGN IN VERY HIGH COST LENDING THAT IS HARMING FAMILIES.”WHEN RESEARCHERS DID THE MATH THEY FOUND THAT TAKING A 500 DOLLAR LOAN OUT FOR SIX MONTHS UNDER H-B 123 AS WRITTEN RESULTS IN THE BORROWER PAYING BACK AT MOST 750 DOLLARS… UNDER HUFFMAN’S PLAN THAT SAME 500 DOLLAR LOAN RESULTS IN ONE THOUSAND 135 DOLLARS.

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