Eye On Olympia

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.


 




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