Colorado House GOP backs down on ‘payday payback’ in tense last day of session

Colorado House GOP backs down on ‘payday payback’ in tense last day of session

In the end, it came to the sort of calculation payday lenders might understand. After spending political capital fast and furiously in the last hours of the legislative session Wednesday, Colorado House Republicans seemed to accept that spending any more in the service of the payday loan industry would end in more loss than gain. They did the smart thing and just stopped spending altogether. They decided to withdraw the amendment they had attached to the annual rules bill on Tuesday that would have rolled back payday fee regulations put in place last year.

Aghast at the surprise strategic maneuver, the Senate rejected the House version of the rules bill and sent back their own version without the payday amendment. The annual rules bill extends hundreds of regulations for industries in the state. It’s a must-pass bill that concerns billions of dollars. So the House GOP majority had a choice: They could go to the mat for the industry and kill the rules bill or they could agree to pass it without what came to be known as the “payday payback” amendment attached by Colorado Springs Rep. Bob Gardner.

Governor John Hickenlooper, steamed at the last-minute gamesmanship, threatened to call an immediate special legislative session that would cost taxpayers tens of thousands of dollars a day. He made it clear he would hold Republicans responsible.

House Speaker Frank McNulty said Gardner’s amendment was a move to save jobs. He said Democrats had started the fight.

“For those families who are about to lose their jobs, for those families who are about to lose their next paycheck, this is a game about job creation. It is not a game of chicken,” McNulty said before the bill came back to the House. “My hope is that they won’t continue this game that they decided to enter into.”

But as the hours wore on, it became clear Republicans were going to lose the messaging war. In addition to having to explain why they were holding up the important rules bill and forcing a special session, they would be forced to return again and again to the fact that the payday industry has given more than $50,000 to Republican candidates in the last year.

There would also be the facts around the regulations as they would be pointed out by political strategists and lawmakers like Denver Democratic Rep. Mark Ferrandino, who had sponsored the regulations last year. Ferrandino and the consumer protection groups he worked with to write the regulations make strong arguments that allowing payday lenders to keep origination fees provides incentive for the lenders to tailor products to get customers to take more loans and pay more fees.

Progressive political groups were already moving to develop campaigns focused on House Republicans costing the state millions in lost revenue and special legislative session overruns.

There was also no guarantee the special session would be any better for Republicans than the regular session. Indeed, due to likely absences, the one-seat majority held by Republicans in the House could well vanish.

When the House assembled for a vote on the bill, lobbyists on both sides of the debate sat in the balcony looking down at the lawmakers on the floor of the chamber. The news was out but the thing had yet to be done.

House Minority Leader Sal Pace, D-Pueblo, and Ferrandino thanked McNulty and Gardner for agreeing to pull the amendment. They said it was a pleasure to work together to move forward for the benefit of the people of Colorado.

Then Gardner stepped up.

“As I said earlier there are larger things here than one particular rule. That one particular rule was in my view worth the debate and worth the discussion and was important for us to put forward, and I continue to believe that the executive branch has exceeded the legislative mandate in respect to that rule.”

With that, Gardner dropped his amendment.

“The conclusion of the Senate Bill 78 debate and the passage of this important measure is just another example of House leadership coming together to do what is right for Colorado,” McNulty said in a release after the vote.


Writing and reporting by John Tomasic.

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