OKPOLICY.ORG
By Catherine Sweeney
OKLAHOMA CITY – A measure that riled up consumer protection advocates and religious leaders this year died in committee, or so they thought.
A measure that would allow what opponents call predatory lending practices has resurfaced in the other chamber.
For a few years now, cash advance companies have pushed for what they’ve called flex loans or installment loans. They increase the cap on small loans. It’s a fast way for people who don’t have good enough credit ratings to get loans, proponents say. They tend to have high interest rates, which are measured in monthly figures. Instead of showing an APR that can be more than 200 percent, the loans bear an interest rate lower than 20 percent.
During 2016’s session, state Sen. David Holt, R-Oklahoma City, introduced a similar bill, saw the resistance and pulled it.
This year, state Sen. Dan Newberry, R-Tulsa, introduced Senate Bill 112, which would have doubled the cap, raising it to $1,500 per person, and borrowers would get a year to pay it off. The interest rate would be capped at 17 percent per month.* It was referred to the Business, Commerce and Tourism Committee, of which he is the chairman. It didn’t get a hearing.
National consumer advocacy groups lamented the Senate bill as a predatory measure that keeps customers in the cycle of poverty. Religious leaders called it usury and said that if Jesus focused on one thing throughout the Bible, it’s how his followers should care for the poor.
House Bill 1913 came up as a committee substitute last month, and the language is quite similar, including the provision that caps interest rates at 17 percent per month*.
A handful of state lobbyists represent Advance America, a South Carolina-based company, which has been pushing similar legislation in multiple states. It’s necessary, vice president of external affairs Jamie Fulmer said.
He said he didn’t need to defend whether the loans are predatory given their track record.
“They have very few instances of complaints with state and federal regulators,” he said. “The facts are clear: Customers have short-term credit needs, and they appreciate the products and services we offer. If the services that we provided did not meet their needs, they would turn to other products.”
He said making quick loans legal keeps customers from going to those other products, such as illegal offshore loans or local unlicensed, unregulated lenders.
David Blatt, executive director of the Oklahoma Policy Institute, criticized the measure and its continued resurgence.
“This is the second year in a row that the payday loan industry has come forward and (pushed for) a new high-cost loan product,” he said. “For 15 years, we’ve tried to get reforms of payday loans through the Legislature, and the industry has managed to keep those bottled up.”
He said this bill not only does nothing to protect residents, it actively puts them in danger.
“Many Oklahomans are drowning in a sea of high-cost debt,” he said. “Rather than throwing them a life preserver, this bill would push them deeper underwater.”
http://journalrecord.com/2017/03/09/payday-loan-legislation-resurfaces/
