May 9, 2025 — The Alaska House Finance Committee took invited testimony on Senate Bill 39, a measure to eliminate an exemption for certain short‑term high‑cost loans and to impose a 36% annual percentage rate cap on consumer loans under $25,000.

"The harm from payday and other high cost loans is powerful and undeniable," said Andrew Kushner, Senior Policy Counsel at the Center for Responsible Lending, testifying by phone. Kushner told the committee that the payday industry’s business model depends on repeat borrowing and cited studies showing the majority of fees come from borrowers who take out many loans per year. He also described an "anti‑evasion" provision in the bill that would treat online lenders that route loans through out‑of‑state banks as subject to Alaska law.

Trevor Storrs, president and CEO of Alaska Children’s Trust, told the committee SB 39 would reduce economic stress that increases family risk factors for child abuse and neglect. "The detrimental impact of economic hardships and poverty on family well‑being is widely acknowledged," Storrs said, urging lawmakers to adopt safeguards for families.

Claire Lubke, economic justice lead at Alaska Public Interest Research Group, said payday loans operate as a debt trap in Alaska. "Payday loans are marketed as one‑time emergency loans, but the average payday loan customer in Alaska takes out more than five loans per year," Lubke said, and added that APRs charged in some cases reach very high levels.

Kushner urged the committee to adopt a 36% cap, noting that a growing number of states and voters have enacted similar limits and that the bill’s anti‑evasion language mirrors provisions already passed in Maine, New Mexico, Washington, Illinois and Connecticut. He also said no state that outlawed predatory payday lending has subsequently reauthorized it.

Committee leadership paused detailed questions because of a scheduled recess and asked the invited witnesses to be available at a later 1:30 p.m. meeting for additional questioning. The committee kept public testimony open and invited written submissions to house.finance@akleg.gov. No vote or motion was taken on SB 39 during the May 9 session.

If enacted, SB 39 would remove the statutory exemption for certain small‑dollar payday loans and set a 36% APR cap, with an anti‑evasion clause intended to prevent out‑of‑state online lenders from avoiding Alaska law.