Recently, a package of payday loan legislative proposals was heard by the House Financial Institutions & Insurance Committee. According to blogger House Democrats, these Department of Financial Institutions-regulated short-term loans have spawned a host of potential new bills. House Democrats is nice enough to provide links to early reports on the hearings here and here. Here’s what’s on the docket:

• HB 1310, regulates collections contact
• HB 1425, which simply prohibits cash advance (why bother with the rest, then?)
• HB 1684, limits all outstanding loan balances to less than 30 percent of a borrower’s gross income
• HB 1685, would add a 60-day repayment option
• HB 1709, minimum term 60 days, reduces fees may not exceed 10 percent of principal, and sets up an installment plan
• HB 1805, limits borrowers when a payday lender has loaned them $700 in the previous 30 days
• HB 1806, sets an aggregate loan limit of $700
• HB 1807, prohibits faxless payday loan rollovers within 24 hours of repayment
• HB 1851, requires that borrowers be made aware of payday loan alternatives

Church has invaded state

One of the main complaints some have against payday loans is that the rates exceed state usury laws. First of all, that’s using the oft-discredited and completely inapplicable method pretending that payday loans> are annual loans. They aren’t, no matter how much lipstick you put on that pig of an idea. Furthermore, the whole idea of usury laws is a holdover from a time when religion unabashedly held power over world governments.

The world has become a bit wiser, but the influence is still hard to shake. Finally, opponents claim that when the loans were first made legal, nobody knew that people would use them more than occasionally. Really? Then set up a database and place reasonable limits on how much consumers can borrow. Do not play big brother for them, or you will face eventual revolt and anarchy.

Payday loan supporters favor choice

It would be a gigantic mistake to ban the payday loan. When people have options, according to these folks, they can make better decisions. Considering that these are basically two-week loans, consumers must show discipline in order to repay on time. And guess what? Studies show that most do (as much as 90 percent)!

Related articles

• Cap payday loan costs, board urges (thestar.com)
• Media Advisory: Canadian Payday Loan Association Available for Comment on the Government of Ontario’s Advisory Board Report on Payday Loan Rates (newswire.ca)
• Payday Loan to Meet your Expenses (personalmoneystore.com)