DENVER– Lawmakers and lobbyists here are doing informal math and developing strategy, asking “Who is for and who is against the payday loan regulation legislation introduced by Denver Democrat Mark Ferrandino?” Kathleen Curry, D-Gunnison, is against the legislation, as it stands, which doesn’t mean she can’t be swayed, she told the Colorado Independent today.
Curry said she remains concerned about thinning the payday industry and the potential loss of jobs and access to credit that would create. She said if bill sponsor Mark Ferrandino could address those concerns in the language of the bill, she could support it.
Curry is one of the fence-sitter lawmakers targeted by payday reform advocates working to shore up support for Ferrandino’s HB 1351.
Curry’s name now appears on the bill as a cosponsor. Don’t be confused, she said. She agreed to co-sponsor the legislation for its general thrust before she had seen the bill in its written form. Curry said that she was concerned about the ramifications of the regulations proposed in the bill as it was introduced.
“My primary reason for not wanting to vote for it is that a number of people would be laid off due to contraction in the industry,” she said. She believes the industry is likely exaggerating the negative effects of the legislation but, still, even half the number of layoffs lobbyists are throwing around would be too many, she said.
Like other lawmakers, Curry said that for a lot of Coloradans payday lenders provided the only access to credit. She said bank late fees and charges can sometimes add up to considerably more than payday advance interest rates
Payday loans average between 300 percent and 500 percent annual interest rates but the loans are short term loans so the interest doesn’t have long to accrue– at least theoretically. Those rates and fees go through the roof when borrowers fall behind on payments.
Curry said she’s willing to talk about getting to a yes vote.
“Rep. Ferrandino is worried about this for all the right reasons,” she said. “If he were able to address my concerns about how many shops would be shut down, I would definitely consider that.”
Ferrandino said he is looking to end the debt cycle of fees and soaring interest rates that characterize the payday industry and that besiege low-income vulnerable Colorado residents.
Curry said she’s doing her own math on what the interest rates should be.
“I am going to have to figure out who is telling me the truth [about what will keep payday lenders in business]. Some kind of midrange APR is needed. Somewhere in between 36 percent [the top bank rate] and 400 percent [the payday rate] that would allow these operations to stay open.”