Michigan Senate approves cap on payday loan interest rates
Legislation to reform the state’s payday loan industry has passed the Michigan Senate.
After passing through the Michigan Senate Finance, Insurance and Consumer Protection Committee in February, Senate Bill 632, sponsored by state Sen. Sarah Anthony (D-Lansing), and House Bill 4343, sponsored by Rep. Jennifer Conlin (D-Ann Arbor), were both approved by the full Senate on Thursday.
Anthony’s bill limits to 36% the annual percentage rate (APR) that payday loan providers could charge customers instead of the current graduated rate that she previously testified can equate to 370%.
Currently, the Deferred Presentment Service Transactions Act allows licensed payday loan providers to enter one payday loan transaction of up to $600 with a customer, with a service fee for each transaction. While the fees are capped, the interest rates are not, which Anthony said puts some borrowers in a debt bind that is hard to get out from under.
While each payday lender is limited to a single loan per customer, they must also enter each loan into a statewide database to ensure that individuals don’t exceed two loans at any one time from different lenders.
https://michiganadvance.com/2024/03/14/michigan-senate-approves-cap-on-payday-loan-interest-rates/
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