Montana Payday Loan Bill Voted Down
A bill to restrict the practice of short-term payday cash loans and title loans, sponsored by Rep. John Parker, D-Great Falls, was voted down, 11-5, in committee Wednesday.
Parker’s bill would have capped interest rates on such personal loans at 36 percent, and would have curbed the practice of “rollover” lending, in which people take out new loans to pay off their earlier ones.
At a House Business and Labor Committee hearing on the measure earlier this week, Parker said that the annual percentage rate on title loans in Montana can reach 300 percent, and it can go as high as 650 percent on payday loans, and that such loans catch people in a “debt trap.”
Faxless cash advance lending industry representatives, though, said the bill would put hundreds of people out of work in Montana because the bill would shut down their businesses.
State Rep. Mike Milburn, R-Cascade, said Wednesday that competition sets the rates on such businesses, and that they wouldn’t exist if no one patronized them.