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Panel raises payday loan cap, adds CPI indexing and blocks negative credit reporting for small loans
Summary
Committee approved Representative Lacombe’s bill to raise the statutory cap on deferred‑presentment/small loans from $350 to $700 and to index the limit to the CPI; an amendment also prohibits negative reporting of these loans to credit bureaus and the bill was reported favorably.
Representative Sam Lacombe presented House Bill 582 as an inflation adjustment for small deferred‑presentment and payday‑style loans. The bill raises the statutory maximum loan amount from $350 to $700 and adds a Consumer Price Index (CPI‑U) adjustment mechanism to reduce the need for frequent legislative changes.
The committee considered an amendment (Amendment Set 2261) that would prohibit reporting negative information about these small‑loan customers to consumer credit bureaus; sponsors and an author said the change was intended to avoid harming borrowers who rely on short‑term credit and to encourage credit building. Representative Jordan and others explained the amendment was intended to protect consumers from negative credit reporting while preserving the option for lenders to report positive payment history.
The Office of Financial Institutions provided informational support and industry witnesses were present but the committee adopted the amendment and voted to report the bill favorably as amended.
Ending: HB 582 was amended to raise the cap to $700, index future adjustments to the CPI‑U, and to limit negative credit reporting; it was reported favorably to the House for further consideration.
