Payday lending bill met with resistance from Kansas lawmakers
Inside Subprime: April 24, 2018
By Ben Moore
A bill that would cap the annual interest rate for Kansas payday lenders has been met with resistance by Kansas lawmakers, who believe it could spell the end of the industry all together.
House Bill 2267 was introduced to the Kansas House on February 2nd 2017. It proposed a number of new regulations for payday lenders in the state of Kansas, including a 36 percent cap on annual interest rates. This APR (annual percentage rate) cap would significantly cut the amount of interest lenders in Kansas are currently allowed to issue. In fact, Kansas payday lenders regularly charge borrowers APR as high as 391 percent, and business is booming. In 2016 alone, Kansas borrowers took out $350 million in payday loans.
Kansas-based payday lenders are concerned that the passing of House Bill 2267 could have the potential to completely eradicate short-term lending from the state altogether, but the bill has been stalled in the House Federal and State Affairs Committee since February of last year.
Initially designed as a move to protect Kansas consumers and break the cycle of debt so many borrowers experience after taking out bad credit loans or no credit check loans, House Bill 2267 also proposed creating a limit to the number of loans that a lender could issue to a single borrower. If passed, this could help decrease the amount of high-interest debt any given person could accumulate from a short-term payday or title lender.
However, legislation on House Bill 2267 has significantly slowed. The delay in legislation review? Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau (CPFB) and the White House Budget Director. Upon his ascension to the CFPB’s highest throne, Mulvaney put all new regulations for the payday loan industry on hold. Mulvaney’s apparent dedication to stripping the industry of any and all regulation has caused stocks for publicly traded payday landers to skyrocket.
Payday lenders in Kansas and across the country have naturally embraced Mulvaney with open arms. As recently as last week, top officials from the country’s payday loan industry held their annual conference at Trump National Doral Golf Club in Doral Florida. But just outside the golf club, a different scene took place. Citizens took to the gates to protest the payday loan industry’s attempts to “prey on the vulnerable” and criticize the high APRs currently used by payday lenders around the country to trap everyday citizens in a lengthy cycle of debt.
Conference attendees have also been harshly criticized for attempting to convince Republican lawmakers around the country to kill bills like House Bill 2267, which would place serious restrictions on the industry.
While attempts to progress with the bill have been slowed, it is still possible for the Kansas House to pass. The bill is currently at 25 percent progress and there will be continued attempts to push the legislation forward in the coming months. Whether that happens in the face of strong opposition from the payday loan industry remains to be seen.
To learn more about payday loans in Kansas, check out these related pages and articles from OppLoans:
- Online Payday Loans in Kansas City
- Lawerence Payday Loans
- Payday Lending in Topeka
- Wichita Payday Loans