Colorado installment loans bill HB 11-1290 up for debate

The Colorado State Capitol building.

Colorado HB 11-1290 may hit the floor for debate this week. (Photo Credit: Public Domain/Colorado General Assembly/Wikipedia)

According to Rep. Larry Liston, R-Colorado Springs, the recently passed Colorado payday lending bill – HB 10-1351, in which the standard two-month payment period for payday loans was replaced by a six-month installment loans term – was toxic to the state’s small consumer loans industry, costing as many as 450 jobs. In order to help bring a measure of equilibrium back to the state economy, Colorado legislators have drawn up HB 11-1290, a bill that would require that customers pay the origination fee on installment loans up front, rather than a pro-rated portion of the fee should the customer pay off the loan early.

Colorado House Bill 11-1290 could hit committee this week

Introduced Friday on the floor of the legislature, Colorado House Bill 11-1290 could be debated as early as this week, reports the Colorado Statesman. The installment loans origination fee of $20 per $100 loaned for the first $300 and $15 per $100 loaned for the next $200 up to a maximum of $500 loaned nets lenders up to $75. In addition, a monthly maintenance of $7.50 per month per $100 and a finance charge of 45 percent can be charged according to Colorado law.

As two-week payday loans can no longer be offered in Colorado, lenders argue that being able to charge a full origination fee as HB 11-1290 stipulates is necessary for survival.

HB 11-1290 sponsors predominantly voted against HB 10-1351

The legislation has 10 co-sponsors in the House, including Rep. Sue Schafer, D-Wheat Ridge, who voted “no” on HB 10-1351, as well as Rep. Ed Casso, D-Commerce City, who favored HB 10-1351. Senate sponsors include other anti-HB-1351 legislators such as Sen. Mary Hodge, D-Brighton, and Sen. Lois Tochtrop, D-Adams County.

Technical correction or incentive to re-borrow?

Supporters of Colorado House Bill 11-1290 maintain that the origination fee change is merely a technical correction to the provisions of last year’s HB 10-1351. Rich Jones of the Bell Policy Center disagrees:

“It’s an incentive for the lenders to get customers to pay off their loans early and then take out more loans,” Jones told the Statesman Friday.


Colorado House Bill 10-1351 fact sheet

Colorado House Bill 11-1290

Colorado Statesman

‘Steering Colorado’s economy back on course’