Republican Sharon Nelson is attempting to bridge the gap between stricter payday lending standards and a bill that will pass the Senate Committee.Every year Seattle tries to send through a payday loan bill that caps the annual interest rates at 36% for lenders and the committee battles it out and nothing ever gets passed. Nelson decided to draft up a bill that both sides of the payday loan wars will not like so it has more of a shot of getting passed and signed. Stating that the bill ” recognizes that for some folks, this works, and it also recognizes that for other folks, it does not work and we need to establish a program to help them get out of debt.”
The new bill will cap the total number of payday loans a person can take out during any calendar year to eight. It will also caps borrowers to a max loan of the lower of 30% of their monthly income or $700. Next the bill forces payday lenders to give borrowers a payment plan with no additional fees for 90 days on debts up to $400 and 180 days for anything above that. Lastly the bill establishes a statewide database that will track all existing payday loans a borrower has taken out.
To read more about key to payday bills? make sure both sides hate it, head on over to the Seattle Weekly.