Skip to main content
Updated:
Original:

Payday lending bill doesn't close in session's final day

Author:

At the end of the legislative session, the focus is on what was accomplished, but the Associated Press notes that legislation designed to protect borrowers from falling further into debt with so-called payday lenders stalled in its final day and did not pass.

Gov. Mark Dayton urged lawmakers to pass the bill and the Senate voted to send a bill to the House, which had earlier adopted a different version. But the session concluded before lawmakers could craft a common proposal. Advocates for payday loan legislation can resume their efforts next year.

Payday loans are short-term, high-interest loans that are typically sought by borrowers lacking credit. They allow lenders to withdraw money from the borrower's bank account to pay back loans. In many cases, the lender lets the borrower pay the debt by taking out another short-term loan.

The measure would have offered reforms by limiting borrowers to 10 loans a year and requiring lenders to check whether borrowers are overextended. The proposal also required lenders to determine whether the borrower is a member of the military and cap the annual percentage rate for their loans at 36 percent.

Lawmakers considering the measure heard tearful testimony from a Duluth mother of four who told the Senate committee she got a payday loan that “just started spiraling.” Needing money to buy her kids Christmas presents, she took a loan without realizing how high the interest rate was, then took out additional loans to cover her payments.

But a Blaine worker who said she doesn’t make enough to cover expenses explained that she borrows $150 at a time and pays back $178 – a fair rate, advocates say, when compared to overdraft fees from banks.

Opponents said the bill would encourage debtors to seek out unregulated or dangerous sources of cash, including Internet sources or old-school loan sharks.

The highest profile action taken by the Minnesota legislature in its last day of business was the passage of the medical marijuana legislation, but lawmakers were busy with other last-day action as well. The legislature passed a bonding bill, expanded tax cuts and limited sales by the Minnesota State Lottery. MPR News reports the bill stops lottery from offering online gambling and games at gas pumps. The change could cost the state nearly $12 million.

Gov. Mark Dayton has not said whether he plans to sign the bill.

Next Up

Karl-Anthony Towns

Timberwolves' winning streak snapped at five games

The Wolves' bid for their longest winning streak since 2014 came up short.

Screen Shot 2020-08-14 at 6.45.53 PM

Teen arrested over fatal shooting of 5-year-old boy in Brooklyn Park

Police say the teen was filming a social media video while handling a gun.

Joe Biden

President Biden coming to Minnesota to promote Bipartisan Infrastructure Law

Tuesday's trip follows passage of the $1.2 trillion Bipartisan Infrastructure Deal.

Kirill Kaprizov

Kaprizov gets into the holiday spirit to rout Jets

Kirill Kaprizov's four points led the Wild to a 7-1 victory.

Kirk Cousins

Coller: Cure to Vikings' disrupted season lies in an explosive passing game

The Vikings go to San Francisco knowing that a win would be a huge boost to their playoff hopes.

unsplash football helmet ground

Judge upholds star QBs suspension for state championship game

Sam Backer, of Chatfield Senior High, won't be allowed to play in Friday's title game.

Screen Shot 2021-11-25 at 7.53.37 AM

Another 5,000 lbs. of goldfish removed from Carver County lakes

It all likely stemmed from people dumping their pets into local waters a few years ago.

Rosaleia Shelton

Appeal to find 19-year-old missing from Bloomington

The teen left her home on Monday afternoon.

hospital, emergency room

Deaths of twin fetuses after woman was shot ruled a double homicide

The woman was shot in the abdomen in mid-September.

Related