Tuesday, February 19, 2008

House Committee Approves Interest Rate Caps on Payday Loans

A House committee approved Tuesday a bill that would cap the amount of interest that can be charged on short-term loans by "payday lenders."

The bill, sponsored by rookie Rep. Mark Ferrandino, D-Denver, caps interest rates at a 45% annual rate. Under current law payday lenders can charge as much as 350% per year interest.

HB 1310 also limits the amount of fees a payday lender can charge to $60 per twelve-month period.

The bill now moves to the House floor.