Bill to bar new payday lenders fails in committee - KLFY News 10

Bill to bar new payday lenders fails in committee


BATON ROUGE, La. (AP) - A proposal that would keep Louisiana from licensing new payday lenders has failed to win support from a House committee that has been sympathetic to the industry.

The House Commerce Committee voted 10-6 Tuesday against the proposal by Baton Rouge Rep. Regina Barrow.

Barrow said the bill would address the oversaturation of payday lenders in working-class communities. She said her district has about 10 payday lenders, which offer short-term loans at high interest rates, in a one-mile area.

Lawmakers who opposed the measure said they didn't want to limit the free market for business.

The House planned a Tuesday debate on separate legislation by Baton Rouge Rep. Erich Ponti that would place other modest restrictions on the payday lending industry.

BATON ROUGE, La. (AP) - Organizations seeking to toughen regulations on payday loans pointed to a report by the Louisiana Office of Financial Institutions that shows state residents shelled out $146 million in fees and interest on the loans last year.

Supporters of a bill by Baton Rouge Rep. Ted James argued Monday that the report demonstrates that payday lenders, which offer short-term loans with high interest rates, trap people in debt.

But that didn't sway the House Commerce Committee, which voted 10-8 against James' proposal that would cap payday loans' annual interest rate at 36 percent.

Opponents of the measure say it would shut down the storefront lending industry in Louisiana.

Monday's vote doesn't end the debate. Other proposals on the House and Senate floor would add other types of restrictions to payday lending.

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