Colorado House approves limits on payday loans
April 19, 2010
DENVER (AP) – The Colorado House on Monday approved and sent to the Senate a bill that would limit payday loan rates.
The measure (House Bill 1351) would limit interest rates to 45 percent annually, down from a maximum 300 percent. It also would allow lenders to charge a $50 fee once a year.
In 2008, voters in Arizona and Ohio rejected measures that would have allowed payday lenders to continue charging high annual interest rates.
The Colorado attorney general’s office reports the average payday borrower in Colorado refinances the same loan five times before paying off the original loan amount. In 2009, the average borrower paid $475.73 in total finance charges to borrow $366.97.