The Patriot-News reports that the Pennsylvania Senate is considering a bill that would make way for the rise of the payday lending industry in the state. The bill passed the Pennsylvania House in 2012.
“We’ve seen nationally since 2005 that payday lenders have continued their push to bring back these loans,” Diane Standaert, senior legislative counsel at the Center for Responsible Lending, a nonprofit in Durham, N.C., that opposes payday loans, tells The Tribune-Review. “There have been a lot of efforts in the states, and they are continually rejected.”
Pennsylvania law (backed up by a state Supreme Court decision) caps interest rates at 24 percent. Critics say payday loans result in interest rates of up to 300 percent, trapping borrowers in an unending cycle of debt.
State Rep. Chris Ross, R-Kennett Square, a supporter of efforts to legalize payday loans in Pennsylvania, points to the flood of solicitations by online payday lenders in television ads and on the Internet as a reason why lawmakers remove the ban in Pennsylvania. Legalizing the business, he says, would allow state oversight and provide better protections for consumers.
“I believe there is a need for a properly structured, short-term lending in Pennsylvania,” said Ross, who sponsored two bills to legalize and regulate loans that passed the state House in 2012 and 2004, but not the Senate. “We’ve got the Internet, for which there is no effective means of regulation to protect consumers.”