Friday, June 8, 2012

House passes bill to OK payday loans

Legislation clearing the way for payday lending in Pennsylvania passed the state House of Representatives on Wednesday over opposition from Democrats.
The proposal would limit the cost of a loan to a 12.5 percent finance charge and a $5 fee. It would require the Department of Banking to commission a database with information about transactions, and bar companies from issuing a loan that would put a consumer's total borrowing over 25 percent of monthly income.
Borrowers could not take out loans from more than two companies at a single time. Those who cannot repay would be allowed to enter into an extended payment plan that would give them four two-week periods to pay the outstanding principal.
Earlier this week, the House added more protections to the bill, requiring lenders to locate further from racetracks, casinos and military installations and accelerating a report on the state of the industry from the Department of Banking to lawmakers.

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