Payday Loan Reform Hearing
JEFFERSON CITY- Rep. Mary Still wants to strengthen regulations of payday lenders. In a legislative hearing Wednesday, she presented her bill, which provides an Annual Percentage Rate (APR) cap of 36 percent.
Still said, "Thirty-six percent is the amount that is recommended by the FDIC that will allow businesses to make money but also be fair to borrowers."
Payday lenders in Missouri charge an average interest rate of 444 percent. This bill would cap the interest rate at 36 percent and also allow 90 days for payback instead of two weeks.
Missouri also allows six renewals, unlike surrounding states. Still's bill is modeled after a measure sponsored by former U.S. Senator Jim Talent which also provided an APR cap of 36 percent.
A second bill, sponsored by Rep. Ellen Brandom, was also heard by the committee. This bill will cap the APR at 1,500 percent. Dozens of people came to the hearing both to support and oppose the bills regarding payday loans.
Tom Linafelt, the director of QC Holding Companies, said "We're here to oppose [HB] 132 based on the fact it will eliminate 10,000 jobs in the state of Missouri."
Opponents argue that this would essentially eliminate these loans, and companies that offer them would not survive.