Pa. Senate panel Hears Testimony About Proposed Payday Lending Law
A controversial bill that would create a friendlier environment for payday lenders to take up residence in Pennsylvania is vying for Senate action this fall.
The state Senate Banking and Insurance Committee held a hearing on HB 2191, which would establish regulations on short-term lenders that would make it more profitable to do business here than the current payday lending law allows.
The bill, sponsored by Rep. Chris Ross, R-Chester, passed the House in June by a mostly party-line 102-90 vote. It would set the maximum finance charge that could be assessed on borrowers at $12.50 for every $100 borrowed, plus a $5 fee.
Opponents, however, see it as a debt trap. They point to research that shows only 2 percent of people use payday loans for unexpected expenses that proponents mention as to why the short-term loans are necessary.
They pointed to a study by The Pew Charitable Trusts that found 69 percent of first-time borrowers used the money to cover recurring expenses.
Read the full article at pennlive.com.