The general consensus among consumer advocates is that payday loans need stricter regulation. The new House Bill 396 is aimed at doing just that to both payday and title loans. Republican Bill Wilson, the sponsor of the bill, said he wants to cap interest rates at an annual rate of 36%. This new interest rate is a drastic change from the current limit of over 700 percent on short term payday loans in the state of Montana.
“This industry thrives on the victimization of vulnerable repeat customers,” Wilson told the House Business and Labor Committee. “The rates these lenders charge is unconscionable and amounts to nothing more than legalized loan sharking.”
Supporters of the bill claim that 18 state have already capped the interest rates on payday loans at 36% & that the federal government has placed the same cap on any payday loan given to military personnel.
To read more about payday loans under fire at Mont. legislature head on over to Forbes.