Kentucky's Capitol
(2010-02-08)
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Rep. Darryl Owens, D-Louisville, wants to cap interest on payday loans to 36% annually. He has offered similar legislation before, which died in the House. Gov. Beshear says he supports Owens' bill, but payday lenders are strongly opposed.
Photo courtesy Legislative Research Commission (Click image to enlarge)
FRANKFORT, KY (WEKU) - A Louisville lawmaker wants tighter restrictions on payday lenders in Kentucky, but the industry is fighting back.
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Rep. Darryl Owens says payday lenders prey on the poor, and leave many customers struggling with long-term debt. Owens and 19 co-sponsors are offering legislation capping interest on payday loans at 36% annually.
"I feel, very strongly, that we can get this done," says Owens. "It is not going to be easy, but of everybody puts their shoulder to the wheel, we can gets this moving."
But the industry says legislation approved last year hasn't been given time to work. It creates a statewide database to track payday loans, to ensure that no person takes out more than two loans with a total limit of $500. The industry predicts the database will eliminate up to 30% of payday loans in Kentucky.
(ADDITIONAL INFORMATION)
Among the 19 House co-sponsors of the bill is Rep. Jim Wayne, D-Louisville.
"You don't treat the poor unfairly," says Wayne. "You don't stomp on the poor when they're down. And the payday loan industry is doing exactly that in Kentucky. They are stomping on the people who are most vulnerable in our state. And they're doing it with a vengeance."
Industry spokesman Scott Jennings strongly denies that, and says a statewide database to track payday loans, approved last year, hasn't been given enough time to work.
"And it will allow enforcement of current Kentucky law, which limits people to two payday loans, totaling no more than $500 at a time," says Wayne. "So, if you have the database in place, then you will be able to track who has reached their limit and then, therefore, will not be able to obtain any more payday loans."
Gov. Steve Beshear, who lobbied for payday lenders before becoming governor, says he supports the bill. Similar legislation has been offered before, but died in the House.
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