In accordance with Rep. Liston, R-Colorado Springs, the recently passed Colorado payday lending bill - HB 10-1351, in which the standard two-month payment period for pay day loans was replaced by a six-month short term installment loans term - was toxic to the state's small consumer loans industry, costing as many as 450 jobs. To help preserve the payday lending business in Colorado and keep jobs in the state, counter-legislation (HB 11-1290) has been proposed, which would require customers to pay the full origination fee for installment loans up front. This is vital, because HB 10-1351 had already run two-week pay day loans out of the state. Article resource - Colorado installment loans bill HB 11-1290 up for debate by MoneyBlogNewz.



Fast review in committee of Colorado House Bill 11-1290




Friday, Colorado House Bill 11-1290 was introduced. The Colorado Statesman explained that it might be debated soon. The installment loans origination fee of $20 per $100 loaned for the first $300 and $15 per $100 loaned for the next $200 up to a maximum of $500 loaned nets loan companies up to $75. A finance charge of 45 percent is allowed also in accordance with Colorado law. Another $7.50 maintenance fee per $100 lent per month is also allowed.



As two-week pay day loans can no longer be offered in Colorado, loan providers argue that being able to charge a full origination fee as HB 11-1290 stipulates is necessary for survival.



HB 10-1351 and HB 11-1290 sponsors argue




The legislation has 10 co-sponsors in the House, including Rep. Sue Schafer, D-Wheat Ridge, who voted “no” on HB 10-1351, also as Rep. Ed Casso, D-Commerce City, who favored HB 10-1351. U.S. Senate sponsors consist of other anti-HB-1351 legislators for instance Sen. Mary Hodge, D-Brighton, and Sen. Lois Tochtrop, D-Adams County.



Technical correction or incentive to re-borrow?




Supporters of Colorado House Bill 11-1290 maintain the origination fee change is merely a technical correction to the provisions of last year's HB 10-1351. Bell Policy Center’s Rich Jones doesn't agree. He says:



“It's an incentive for the lenders to get customers to pay off their loans early and then take out more loans,” Jones told the Statesman Friday.



Information from




DORA


dora.state.co.us/Financial-Services/pdf_forms/Revised HB10-1351_2.pdf




State Bill Info


statebillinfo.com/bills/bills/11/1290_01.pdf




Colorado Statesman


coloradostatesman.com/content/992687-payday-lender-bill-being-fast-tracked-through-house




'Steering Colorado's economy back on course'


youtube.com/watch?v=3mHOl-S6F1s

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