Greer says bill to cap payday lending interest at 36% will likely get a hearing
01/05/2011 07:24 PM
Legislation filed Wednesday that would cap the amount of interest payday lenders could charge at 36 percent will likely get a hearing in the House banking and insurance committee this year, the panel’s chairman said on Pure Politics.
Rep. Jeff Greer, the Brandenburg Democrat who heads up that committee, said unlike last year when he didn’t call the issue for a hearing, lawmakers will have cold, hard statistics to work with this time to help them make the right decision.
“This time there is hard evidence that we can see whether this is something we need to do serious changes to,” he said.
That’s because a database created by law two years ago has been tracking how many individuals have taken out loans and how much they are paying in interest. The state’s department of financial institutions manages that database.
Greer said during the taping Monday afternoon that he wanted a signal from House Democratic leaders before he decided whether to call a hearing on the issue this time.
He got that signal Tuesday when House Speaker Greg Stumbo told reporters that he thought it was time to look at capping interest rates on those lenders.
“I would need to see the bill first, but my committee is prepared to hear the bill,” Greer said.
Rep. Darryl Owens, a Louisville Democrat, filed the bill in 2010 that aimed to cap interest rates at 36 percent. He filed the legislation again Wednesday with 22 other House Democrats as co-sponsors.
Consumer advocates have been clambering for additional regulation of the industry, which provides quick cash to borrowers but often include fees and interest that mount up quickly.
In an op-ed to the Herald-Leader last month, Anne Marie Regan and Lisa Gabbard wrote that the database that started collecting data in April showed that borrowers at payday loan establishments took out money an average of 8.6 times and had interest rates that added up to as much as 400%.
Greer, in the interview, also addressed several pre-filed bills aimed at health insurance that could be assigned to his committee.
- Ryan Alessi
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