JEFFERSON CITY, Mo. (AP) — Missouri lawmakers are considering an overhaul of the state's payday loan industry that would give borrowers more time to pay back a loan.
The legislation passed by the Missouri Senate last week also would stop borrowers from renewing a loan and would remove a cap on the amount of fees and interest lenders can charge.
Under current law, payday loans can be up to $500 and last from 14 to 31 days. Loans can also be renewed up to six times.
Sponsoring Representative Mike Cunningham of Rogersville says the cap is not necessary since loans can't be renewed, and that market forces would set the interest rates. The measure's opponents said the bill was a step in the right direction, but doesn't go far enough.
JEFFERSON CITY, Mo. (AP) — Missouri consumers may soon find it easier to turn to their local banks to get a short-term loan until their next paycheck.
Governor Jay Nixon signed legislation Friday that will double or triple the fees that Missouri-chartered banks can charge for short-term cash advances.
Bank officials have said that the state's current maximum-allowed fees of $25 or 5 percent of a loan don't provide enough financial incentive for many banks to offer the short-term loans. The bill raises the fee cap to $75 or 10 percent of a loan's value.
The legislation could help banks compete with payday lenders, but it faced no opposition from the payday loan industry.
Some consumer advocates raised concerns about the bill, but only after it passed.