Payday Loan Bills | Pass in British Columbia, Fail in Arizona

British Columbia bill caps interest rates

Starting this fall, interest rates that can be charged on payday loans in British Columbia will be capped at 23 percent.

Unlike most legislation in the United States, the British Columbia law doesn’t cap the annual interest rate; it caps the interest that can be charged each time the borrower defaults on the loan.

Encouraging responsibility

The legislation in British Columbia means that when a person takes out a payday loan, all of the fees and interest assessed at the time of the loan can only add up to 23 percent.
If the borrower pays back the loan at the agreed upon time, usually within two weeks of the loan date, that is all the customer pays. Only if borrowers fail to pay back the loan will they face more interest charges.

Encouraging education

Another provision in the British Columbia bill states that loan terms must be clearly displayed for customers who enter a payday loan store. According to Globe British Columbia:

The full cost of borrowing will be posted for consumers to see when they walk into a payday-loan storefront in B.C. starting in November. It will be displayed on the desk where they sign a contract, and it will be disclosed in the contract itself.

Arizona defeats payday loan reform bill

Once again, a bill to cap payday loan interest rates in Arizona has been defeated. House Bill 2608 would have capped interest rates so that the maximum interest rate on loans that were delinquent for a year would be capped at about 133 percent. ... click here to read the rest of the article titled "Payday Loan Bills | Pass in British Columbia, Fail in Arizona "