Mo. Banks Get Ability to Compete with Payday Loans
JEFFERSON CITY (AP) - Missouri consumers may soon find it easier to turn to their local banks to get a short-term loan until their next paycheck.
Gov. Jay Nixon signed legislation Friday that will double or triple the fees that Missouri-chartered banks can charge for short-term cash advances.
Bank officials have said that the state's current maximum-allowed fees of $25 or 5 percent of a loan don't provide enough financial incentive for many banks to offer the short-term loans. The bill raises the fee cap to $75 or 10 percent of a loan's value.
The legislation could help banks compete with payday lenders, but it faced no opposition from the payday loan industry.
Some consumer advocates raised concerns about the bill, but only after it passed.