Online Calculator | Colorado HB 11-1290 Changes Short Term Installment Loans Debate

Colorado HB 11-1290 Changes Short Term Installment Loans Debate

‘Steering Colorado’s economy back on course’

According to Rep. Larry Liston, R-Colorado Springs, the recently passed Colorado payday lending bill – HB 10-1351, in which the standard two-month payment period for payday loans was replaced by a six-month short term installment loans term – was toxic to the state’s small consumer loans industry, costing as many as 450 jobs. To be able to help bring a measure of equilibrium back to the state economy, Colorado legislators have drawn up HB 11-1290, a bill that would require that customers pay the origination fee on short term installment loans up front, rather than a pro-rated portion of the fee should the customer pay off the loan early.

This week, the Colorado House Bill 11-1290 might get to committee

The Colorado Statesman states that Colorado House Bill 11-1390 could be debated this week after getting introduced on Friday. The lender can make up to $75 on a maximum of $500 loaned after an installment loan origination fee of $20 for every $100 loaned up to $300 and $15 for every $100 loaned after that. In addition, a monthly maintenance of $7.50 per month per $100 and a finance charge of 45 percent can be charged in accordance with Colorado law. Two-week payday advance loans are unlikely in Colorado now. Loan companies say the only way business can continue is if the full HB 11-1290 origination fee is charged.

Not many support both HB 11-1290 and HB 10-1351

The House had 10 co-sponsors sustaining the legislation including Rep. Ed Casso, D-Commerce City, who was for HB 10-1351 and Rep. Sue Schafer, D-Wheat Ridge, who gave a “no” vote to HB 10-1351. Senate sponsors consist of other anti-HB-1351 legislators for instance Sen. Mary Hodge, D-Brighton, and Sen. Lois Tochtrop, D-Adams County.

Is it really a correction?

The origination is just a technical correction to HB 10-1351 in accordance with House Bill 11-1290 supporters in Colorado. Rich Jones of the Bell Policy Center disagree:

“It’s an incentive for the lenders to get customers to pay off their loans early and then take out more loans,” Jones told the Statesman Friday.

Citations

DORA

dora.state.co.us/Financial-Services/pdf_forms/Revised HB10-1351_2.pdf

State Bill Info

statebillinfo.com/bills/bills/11/1290_01.pdf

Colorado Statesman

coloradostatesman.com/content/992687-payday-lender-bill-being-fast-tracked-through-house

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