Payday loan liberation: Kentucky House Bill 182 fails to pass

Kentucky lawmakers who stood behind House Bill 182 are now wallowing in the agony of defeat, reports the Louisville Courier-Journal. The suggested legislation that could have cut the Annual Percentage Rate personal loan companies might charge to 36 percent was voted down 13-10 in the Kentucky House Banking and Insurance Committee. Army loans in the state will remain at a federally mandated thirty-six %.

Keeping payday advance businesses open

House Bill 182 was sponsored by Louisville Democrat Rep. Darryl Owens. He compared meat with the payday loans bill.

"It’s done. You can stick a fork in it," he said.

Rep. Owens think the pay day loan interest rates are "obscene" like several others even though there have been numerous extant studies that show that payday lending is much less expensive than alternatives. When it comes to financial issues, only a few who get payday advances actually have a hard time. It was shown that defaults and rollovers are rare since most users have enough income to repay the loan.

Certainly Kentucky doesn't think the very same way Rep. Owens and company do

John Rabenold said House Bill 182 would have been "a job killer." Rabenold is in the payday lending industry group Kentucky Deferred Deposit Association. For every $100 loaned, only $1 in profit would be made with an APR of thirty-six percent. The "profit" is taken away totally after a cash advance business pays for operational and salary expenses. Kentucky would lose around 2,000 jobs because of 650 payday lending outlets closing down in the state. That is something politicians might never be able to admit to having done.

Kentucky wants to keep payday advances available

Customers whose access to traditional credit has been restricted due to credit history will inevitably experience financial shocks from time to time, particularly when emergency expenditures arise. Payday advances are needed whether it’s for medical bills or automobile repairs. The Courier-Journal reports that Democratic Rep. Jim Gooch thinks that families in Kentucky need access to the payday lending industry. He is worried that families would have nothing to do when an emergency arises.

Articles cited

Louisville Courier Journal

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