Mo. Bill Lets Banks Compete with Payday Lenders
JEFFERSON CITY, Mo. (AP) - People running short of money could have a new alternative for getting some quick cash under legislation pending before Gov. Jay Nixon.
The bill would make it profitable for Missouri-based banks to offer short-term cash advances, similar to payday loans.
Some nationally chartered banks already offer the short-term loans with fees of around $50 on a $500 loan. Missouri law had allowed such loans, but the Missouri Bankers Association says that few banks offered them because the law set the maximum fee too low.
Some consumer groups have raised concerns about the short-term bank loans. They say people can become dependent on costly debt, just like with payday loans.
Nixon has not indicated whether he will sign or veto the legislation.