BATON ROUGE, La. (AP) – Payday lending businesses that offer quick, upfront cash for costly repayment rates are targeted for tougher regulations by organizations that represent the elderly and the poor.
They want lawmakers to cap the fees that can be charged by the storefront lenders at an interest rate of no greater than 36 percent annually. Supporters of the proposal say the short-term loans currently carry exorbitant fees that put borrowers in never-ending cycles of debt.
The tougher restrictions are proposed in bills sponsored by Rep. Ted James of Baton Rouge and Sen. Ben Nevers of Bogalusa. They'll be considered in the legislative session that begins Monday.
Payday lenders say if lawmakers approve the measures, they could put payday loan stores out of business and send their customers to more expensive, unregulated borrowing options.