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Senate rejects bill creating high‑rate ‘consumer alternative’ installment loans
Summary
The Senate considered House Bill 513, which would have created a new consumer installment‑loan product with no upfront fees and an annual percentage rate cap near 59%. After extended debate about predatory lending and consumer protection, the bill failed on a roll call, 7 yeas to 30 nays.
The Louisiana Senate debated House Bill 513 on the floor June 2, 2025. The bill would have created a new consumer loan product called a “consumer alternative installment loan,” allowing loans up to $5,500 with no upfront fees and an annual finance rate the bill allowed up to 59 percent.
Proponents, led on the floor by Senator Abraham, said the product was intended to reach borrowers who cannot obtain credit elsewhere. “There’s a small group of people that need access to capital and no one else will lend to them,” Senator Abraham said while explaining the measure and an amendment that limited which credit unions could make larger loans.
Opponents called the proposal predatory. Senator Price said the structure “puts people deeper and further in debt,” citing an example used on the floor that a borrower who took the statute’s maximum would repay several thousand dollars in interest on a $5,500 loan. Senator Luna raised legal and fiscal questions about interaction with Louisiana’s usury rules and about administrative costs the compact‑style regulatory language would impose on the state.
After extended questioning and a series of exchanges between senators about borrower profiles, rates, and consumer harm, Abraham called for final passage. The motion failed on the roll call: 7 yeas, 30 nays; the bill did not pass the Senate.
The debate repeatedly returned to two themes: whether the state should allow higher‑cost alternatives for people with no other access to credit, and the risk that such products would be “predatory” and increase long‑term indebtedness among vulnerable borrowers. Several senators asked staff to review whether the bill as drafted complied with state usury standards and whether the bill’s disclosure and consumer‑protections were sufficient.
With the vote, the Senate ended consideration of House Bill 513 without adopting it. The transcript records no amendment that altered the central rate or maximum loan amount before the final vote.
