Payday lending debate returns to Olympia. But this year it might be different…

It happens every year. Poor people and advocates descend on the capitol, decrying usurious rates ($100 loan rolled over for a year: 391 percent APR) and saying that the payday lending industry traps people in a nearly unbreakable cycle of high-interest debt.

Lawmakers propose bills — cap interest at 12 percent, cap interest at 36 percent — and the bills die, generally in the House financial institutions and insurance committee. Chairman Steve Kirby has for years defended payday loans as a needed product for people who simply cannot qualify for credit cards or bank loans.

This year, things may end up differently. Kirby himself is prime-sponsoring 5 bills that he says will preserve the industry while making it harder for people to get trapped in debt and easier to get out. The hearing’s going on right now — I’m watching it live on TVW while trying to get a column written.

“This is the year to address the problems within this industry, and I intend to make a side career…out of hammering some sort of agreement” between the industry and its critics, he said.

Consumers, a credit counselor and the enforcement chief for the state Department of Financial Institutions have all testified about harassing collection practices some of the lenders have used: berating people at work, visiting them at home, verbally abusing them (“I’m going to be your worst nightmare”), etc. One formerly-homeless woman just said she eventually paid $2,694 in fees after initially borrowing $300.