Fifty Three to Fifty Six: Assembly Bill 4

Sunday, January 14, 2007

Assembly Bill 4

This bill creates a maximum finance charge for payday loans. Under the bill, a lender, other than a bank, savings bank, savings and loan association, or credit union, who makes payday loans in the regular course of business, which the bill defines as a "payday loan provider," may not assess a finance charge that exceeds 2 percent per month. In addition, a payday loan provider must obtain the license described above. Also, the bill requires the division to enforce the bill's prohibition.

See the bill here

Analysis -- This bill should have a slightly positive effect, regulating an industry that generally pries on the mismanagement of limited resources by many low-income families. It is not unfair, in that the bill simply requires that the payday loan agencies follow the same regulations that other loan agencies must follow.


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