Nevada lawmakers considered a bill Monday that aims to curb predatory short-term lending by better disclosing the rates and risks of payday loans.
Republican Sen. Michael Roberson is sponsoring SB242, which would enact the Payday Lender Best Practices Act. The bill garnered wide support at the hearing, including from representatives of payday and car title loan businesses.
“We think this is good for the industry,” said Alfredo Alonso, lobbyist for payday loan industry trade group Community Financial Services Association. “Obviously there’s been a lot of talk about some of the abuses in the industry and we hope this fixes some of those problems.”
The bill would require lenders to disclose fees and interest on a loan in both dollars and annual percentage rate before a borrower signs it.
The measure also requires payday loan advertisements in print, on TV or on the Internet to tell consumers that their products should only be used as a short-term financial solution.
Republican Sen. Becky Harris raised concerns about a provision that would limit payday loan rollovers, which are the equivalent of paying the minimum on a credit card bill and delaying the due date. The measure would prevent further rollovers after 90 days.
Harris said she was concerned financially strapped borrowers might not be able to pay within 90 days.
Keith Lee, a lobbyist for an auto title loan company, said the cap was intended to get borrowers off the “treadmill of debt.”
SB242 had much broader support than another payday loan bill discussed in February. That measure, SB123, would allow payday lenders to sue borrowers for unpaid debt and drew sharp criticism from Democrats who said it would prey on people already struggling to pay back high-interest loans.
Republican Sen. James Settelmeyer, the chairman of the committee that reviewed the bill, said SB123 has been “indefinitely postponed,” which means it is essentially dead.
Democratic Sen. Kelvin Atkinson said he figured payday lenders must be hiding something if support for SB242 was so unanimous.
“I’ve never seen so many people in favor of a payday loan bill so something has to be wrong,” he said.