Check out this picture.   The woman on the left is Rep. Sharon Nelson of the Washington State House.  She sponsored the onerous payday lending bill that just passed.

In Washington State, the govenor signed a tough “collections” law.  From the story:

Key points of SB 5164; Download entire bill as passed by the legislature.

- Forbids threatening to take any legal action against the borrower which the licensee may not legally take.

- Unless invited by the borrower, a licensee may not visit a borrower’s residence or place of employment for the purpose of collecting a delinquent small loan.

Hot off the wires.  A new bill was passed in the House that seems to be a mish mash of various bills that have been floating around.  From the story:  

Under the legislation, payday loans would be limited to no more than 30 percent of a borrower’s income or $700 – whichever is the lesser of those two figures.

The lenders in Washington State aren’t quoted in this piece so we don’t know what they think.  We’ll let you know as soon as we hear something.

An editorial in Washington State that calls for “compromise” on payday lending legislation.  Never thought we’d live to see the day:

If legislative negotiators succeed at crafting a proposal that splits the difference fairly, it will be cause for celebration. Just don’t expect to hear any cheering coming from the payday lenders or their foes.

We’ll definitely wait to see the “compromise” before we boo or cheer.  

From the article:

The compromise bills would limit the size of a payday loan to 30 percent of a person’s monthly income or $700, whichever is less. They would also bar people from having multiple loans at different payday companies, and set up a database to track the number of loans taken out by people.

The bill also enacts an installment plan for people who fall behind on their loan payments that would allow customers to have up 90 days to pay back a loan of $400 or less, and 180 days for a loan of more than $400 without a fee. Currently, a borrower has 60 days and must pay fees.

The bills are getting lukewarm responses from both sides of the issue.

Compromises usually get lukewarm responses.

From the Olympian:

Some bills would prevent lenders from contacting borrowers at work. Others would cap loan fees at anywhere from 10 percent to 36 percent, which is the federal limit for loans to military personnel. One bill, HB 1684, limits total loan balances to 30 percent of a borrower’s income and creates a database of all loans and borrowers to ensure that excess credit is not extended.

Tuesday’s hearings in House and Senate committees drew testimony from people who said they had become trapped by a cycle of debt through paycheck loans. The loans are obtained by giving a lender a post-dated check that is not cashed for a few weeks.

Nothing will happen fast.  I think we’re at least a couple months away from decisive action in the state legislature.

I’ll give ‘em oomph!  This incomprehensible editorial from the News Tribune (WA) calls for tighter regulations on payday lending without giving any hint that the writers know what they’re talking about.

This editorial from the Columbian (WA) is almost too painful to read:

Scenario I: Bob borrows $100 from Mary, agreeing to pay her $115 in two weeks. He needs the money quickly, she wants to help him out, and 15 bucks seems like a pretty fair deal for both of them.

Scenario II: Jack goes to buy a car and is offered an annual percentage rate of an astounding 391 percent. Incensed, especially when other dealers offer APRs in single digits, Jack storms out of the dealership.

The editorial writers, who’ve of course don’t need payday loans, go on to say they should be restricted for everyone else.  They also quote the Center for Responsible Lending’s phony statistics.

Washington State Senator Craig Pridemore want to extend the payment period for a payday loan to 60 days.   He says it’s not a “ban” but a service that is unprofitable is, in fact, a ban.  From the story: 

Under his Fair Payday Loan Act, introduced as Senate Bill 5750, borrowers who are unable to repay their original loans within 60 days would be able to enter into payment plans that extend their repayment period by one month for each $100 they owe. Lenders would not be allowed to charge additional fees or interest as part of the change to the new payment plan.

“The goal for a short-term loan should be to get over temporary hardship,” Pridemore said. “These loans have the effect of putting people in perpetual debt. People who have to take out payday loans typically live paycheck to paycheck and are especially vulnerable to the high interest rates and loan processing fees charged by payday lenders.”

Rep. Sherry Appleton has introduced a rate cap bill.  We’ll keep readers posted on any developments, but it’s interesting that she is already threatening a ballot initiative if her bill doesn’t pass.