[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6063143,"mediaKeyId","3270684-f3b4071eb0b0126771b194777fef0eed","parentId",3270684,"title","House Finance holds bill to cap payday-loan APR at 36% after hours of testimony","audioSeconds",3437,"startMs",2622000,"endMs",6059000,"viewUrl","/Search/View?dp=1&key=3270684-f3b4071eb0b0126771b194777fef0eed&start=2622&end=6059","thumbnailUrl","https://assets.pipeline.soar.com/3270684-f3b4071eb0b0126771b194777fef0eed/thumbnail_2622000.jpg","articleUrl","/articles/6063143/Alaska/House-Finance-holds-bill-to-cap-payday-loan-APR-at-36-after-hours-of-testimony","mediaUrl","https://secure.pipeline.soar.com/6063143-b9538992829d3567e9208824a1a64b18/orig.mp4?Expires=1771222449&Signature=NW8nYnng8OZAuY2lZzhOJS7omXE8rQv2xSJXbMHF-MzspHXHEJYrDTDiU1iYc1wxs1732wupQqb~wJK4inv7PiHyiKRNClQSdcASqM~0tCrvJ5r-PBgK4CdA47~qotzR4oy139D~37GgkFgFKwagvCbFkGb8kUjd-lcFjxuQQCDdTDJTMLY52Mf2yaBIiyYvZkzwnd-urYI7~EnoAyLpKERRRtd9dQAaYoEgAY8Ujh06hCgkOz~DmsnKz~~GOiv58jbDZXitmKDlqpwI9rbIfKiXx7cIYYk9rboE8ME4l8n19zwCOVdvNy5m23UpSjf7zl~jijiWf33CJknBUPVmrA__&Key-Pair-Id=KUT5TJCACFTXG","author","Alaska Legislature","date","2025-05-09T00:00:00Z","article","The House Finance Committee on May 9 held Senate Bill 39, a measure sponsored by Sen. Robert Dunbar that would cap annual percentage rates for payday and other small-dollar loans at 36% and add an anti-evasion clause to bring some out-of-state online lenders under Alaska law.

The bill’s sponsor told the committee the change would align state law with the federal cap already protecting active-duty service members and argued the measure would reduce cycles of repeat borrowing that drive severe debt. \"This bill...would bring payday lenders in line with Alaska's existing small loans act,\" Dunbar said. He also told the committee that Alaska borrowers who use payday products take out an average 5.5 loans a year and that some lenders charge triple- and quadruple-digit APRs.

Why it matters: testimony from consumer groups and the sponsor emphasized that payday loans often lead to repeat borrowing and financial instability. Claire Lubcke of Alaska Public Interest Research Group said existing statutory disclosures and payment-plan requirements have not prevented many borrowers from taking successive loans: \"The deferred deposit advance licensees statute does require a disclosure before they make a loan to a customer,\" she said, and added that survey data show repeat borrowing is common.

Key facts and evidence presented
- Sponsor's intent: Sen. Dunbar described the bill as \"a bill to cap payday loan annual percentage rates at 36% aligning with the federal cap that already protects active duty service members and their families.\" He said the bill passed the legislature last year and was refiled with minor technical changes.
- Consumer-impact findings: Dunbar and witnesses cited research indicating the payday model depends on repeat borrowing; Dunbar said the Alaska Public Interest Research Group reported average payday APRs in Alaska near 421% and average borrower frequency of 5.5 loans per year.
- Garnishment of Permanent Fund dividends: Dunbar said payday lenders garnished about $3,700,000 from Alaskans' permanent fund dividends from 2017 to 2022.
- Fiscal note: Brodie Anderson, staff to Rep. Neil Foster, summarized a fiscal note from the Department of Commerce, Community and Economic Development showing no operating-cost impact in FY26 and an estimated revenue reduction of $19,500 per year to reflect reduced license receipts. \"This fiscal note reflects a 0 operating cost in the FY 26 appropriation. But it does reflect a change of revenue of a reduction of $19,500 of lost revenue,\" Anderson said.
- Current payday-law mechanics: Division of Banking and Securities staff confirmed current law treats the product as a deferred-deposit advance capped at $500 with a typical 14-day term that may be extended; Chief of Examinations Tracy Reno said, \"that is correct that it's 14 days. They may be extended, and then rolled...but it is $500 max for 14 days and then there's possibility of extension.\" Committee testimony clarified the statute permits an origination fee (commonly $5) and a flat fee (commonly 15%) rather than an interest-rate line item, and that borrowers may take out new loans after rolling an originating loan twice.
- Anti-evasion language: Andrew Kushner of the Center for Responsible Lending described the proposed anti-evasion clause as a response to \"rent-a-bank\" arrangements. He summarized the provision: \"for certain online lenders that partner with a state bank...the online lender...can become subject to Alaska law,\" a mechanism other states have used to prevent out-of-state lenders from evading state interest-rate limits.

Debate and concerns
- Access to small-dollar credit: opponents and several committee members raised concerns that a 36% cap would make small-dollar loans uneconomic for some lenders and reduce access for underbanked consumers. Senator Dunbar and consumer witnesses countered that other states have not seen catastrophic loss of small-dollar lending and that mainstream banks, credit unions and new fintech products offer alternatives.
- Pawn loans and collateralized lending: committee members asked why pawn loans are treated differently. Dunbar and witnesses explained pawn loans are collateralized and have long been treated as distinct under state law; proponents said pawn-shop business tends to remain local and is not the same repeat-debt model as payday products.
- Unclear practical access: lawmakers pressed regulators and witnesses about how low-income Alaskans would obtain emergency funds if payday products became less available. Dunbar and witnesses pointed to small-dollar products from some credit unions and fintech lenders that operate within the 36% cap, and to state homeless- and rental-assistance programs.

Committee action and next steps
The committee did not take a final vote on SB 39 on May 9. Cochair Foster said the bill would be held for further consideration and likely taken up again at the committee’s next meeting. The committee requested further written information and clarifications from regulators and interested parties.

Ending: The committee scheduled a continuation of its work for Monday, May 12, and committee leaders said they would circulate follow-up materials and any updated fiscal or technical analyses before the next hearing.","mediaType","Video","parentTitle","05/09/2025 01:30 PM House FINANCE","oneSentenceSummary","The House Finance Committee on May 9 held Senate Bill 39, a measure sponsored by Sen. Robert Dunbar that would cap annual percentage rates for payday and other small-dollar loans at 36% and add an anti-evasion clause to reach some out-of-state online lenders.","taxTitle","2025 Legislature Alaska, Alaska","taxId",78559,"location","Alaska","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6063138,"House Finance reports out Senate Bill 57 capital budget, 6–4",90,1983000,2073000,"/Search/View?dp=1&key=3270684-f3b4071eb0b0126771b194777fef0eed&start=1983&end=2073","https://assets.pipeline.soar.com/3270684-f3b4071eb0b0126771b194777fef0eed/thumbnail_1983000.jpg","/articles/6063138/Alaska/House-Finance-reports-out-Senate-Bill-57-capital-budget-64","https://secure.pipeline.soar.com/6063138-5dcb77a95355b612594b9c47e562d772/orig.mp4?Expires=1771222449&Signature=SePjQszCMCt71~rw0AdyIKarVfaYNYkHvs2ERev8Lxo4FUfQ3PnnvOcaBZ8d3~~MPJKwBOWsHO03PyLfAgPWfnSYmufGqF37tMn-zakSArma~CFV8pePojhXZoXFKiCXdlNrG2KT3JBPpf0ID66h1sQEZa6jRU~P2WKBrZjJjxUay3biW4ZSGbxgYJmG486Pk4FBLxMPJtf6QPU2HJJrEeAiUSCSugxs-rJ5bidqu9pPIBu3nSphNuqJ0n2hs-6r0UP2WjM5iM7vV-4rrXSYTcvpFC0NztutloOqctNLN5MhvYpwqKVuG2jYWmhqp2~5pxn-W9VEXJqSa7WrHiAfmw__&Key-Pair-Id=KUT5TJCACFTXG","The House Finance Committee voted 6–4 on May 9 to report Senate Bill 57, the capital budget, out of committee with the committee’s substitute, shifting funding toward deferred maintenance and trimming the unrestricted general fund (UGF) contribution.

Representative Schrage moved the committee substitute. The motion as read asked that \"house CS 4 CS for Senate Bill 57...be reported out from House Finance Committee with individual recommendations and authorization be given to the legislative finance division and the legislative legal services department to make any necessary technical or conforming changes.\" After discussion and objection-for-discussion, the roll call returned six yes and four no. The committee clerk recorded the tally as \"6 yea, 4 nay.\"

What changed in the substitute
- Added $19,000,000 for school major maintenance grants to fund the top nine projects on the DEED list, according to committee remarks.
- Added $1,350,000 for Mount Edgecumbe’s top deferred-maintenance project.
- Added $10,000,000 for statewide deferred maintenance and $5,000,000 for University of Alaska deferred maintenance; $750,000 for court building maintenance was also included.
- Increased a tourism-related grant to the Alaska Bridal Industry Association by $2,500,000 and added $53,000,000 in receipt authority to the University of Alaska Fairbanks (UAF).
- Committee reported achieving a $730,000 reduction in UGF; the committee’s substitute brought the UGF total to about $161,000,000 — described in committee remarks as roughly a 45% reduction from the governor’s original proposal.

Sponsor and committee comments
Cochair Shrogy summarized the committee’s priorities and said the primary changes \"revolve around funding to help address Alaska's deferred maintenance, including adding an additional 19,000,000 for school major maintenance grants to fund the top 9 projects on DEED's list,\" and listed the other additions. Shrogy also noted that \"there were no individual CAMSYS projects added into this capital budget.\"

Action and procedural notes
- Motion: \"House CS 4 CS for Senate Bill 57, finance work order 34-GS-1460\" moved by Representative Schrage.
- Objection for purposes of discussion was raised and then withdrawn; Representative Johnson recorded a formal \"no\" during the later roll call and was listed among the four nays.
- Vote: 6 yea, 4 nay; committee reported Senate Bill 57 out of committee.
- Authorization: Legislative Finance Division and Legislative Legal Services were authorized to make necessary technical and conforming changes to the committee substitute.

Ending: The committee adjourned for a brief recess after the vote and resumed later in the afternoon to take up additional bills, including the payday-loan discussion.","House Finance voted 6–4 to report out the FY25–26 capital budget (Senate Bill 57) with committee changes that shift funds toward deferred maintenance, school major maintenance grants and university receipt authority while reducing unrestricted general fund (UGF) use by $730,000. The committee authorized staff to make technical changes.","actionData","errors"]

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House Finance holds bill to cap payday-loan APR at 36% after hours of testimony

House Finance reports out Senate Bill 57 capital budget, 6–4