Opponents concerned it will place borrowers in higher debt
San Francisco, CA -- (SBWIRE) -- 06/17/2013 -- With all be a few days passed on the special legislative session, a new controversial proposal has been backed by the Seattle-based payday lender is stepping forward. It was just one of five policy bills that was moved forward by the Senate Rules Committee, along with the remainder of the Senate budget.
Critics of the Senate Bill 5312 are now up in arms regarding the proposal being an end-around to previous payday-lending legislation that has been passed. Former bills looked to reduce predatory lending practices that cause many to fall into deeper debt than they can afford to pay back, thanks to high interest rates.
The new bill will now look to allow for payday lenders to make more effective types of loans up to $1,500 with more quality interest rates, according to the backers. However, the rates could be allowed to top as much as 200%, according to those against the bill. The installments for loans would be set at 18 months, and would likely see many borrowers falling under water to their debts.
The current payday lenders ceiling tally is set at $700, and such loans are repaid by borrowers on the following payday.
Senator Sharon Nelson has remained vocal on the issue and the bill since it was introduced. She disagrees that the bill allows to continue to hold necessary jobs. “That’s just not the case,” Nelson said.
Nelson said the “harmful effects of predatory lending” would offset any jobs that would result from the legislation.
“Right now, all we should be dealing with is the budget of the state of Washington,” she said.
Jim Richards works with Statewide Poverty Action Networks, and believes the senator is correct in her feelings regarding the bill and lenders. “Apparently allowing one company to increase its predatory lending that preys on the working class and on the poor is more important thanpassing a state budget,” Richards said.
Sen. Steve Hobbs, however, believes the bill is helpful to the industry. He is the prime sponsor of Senate Bill 5312, and stated it was “an attempt to get rid of payday lending and replace it with something better.”
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