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House approves changes to payday-lending practice; bill requires credit checks, reporting and a no-interest repayment option
Summary
Second substitute HB292, sponsored by Representative Daw, passed the House after sponsors said the payday-lending industry offered concessions including mandatory database checks for first-time borrowers, lender reporting to subprime agencies, a court-notice option for interest-free long-term repayment, and reporting of court filings; the bill passed on the floor and will go to the Senate.
Representative Daw presented second substitute House Bill 292, describing negotiated concessions from the payday-lending industry intended to reduce historic consumer harms and court filings. The substitute requires lenders to use one of several screening methods for first-time borrowers (including a commercial subprime credit check), mandates reporting of lending activity to a subprime database to improve data-sharing, and requires that notices that accompany court filings clearly offer a borrower the option of a long-term repayment plan (60–90 days) without additional interest or fees.
Daw said the industry offered these changes in response to concerns about the number of court cases against borrowers; he highlighted the bill’s requirement that lenders report how many court cases they file and, for each case, how many payments had been made prior to litigation. Multiple members praised the bipartisan and stakeholder-driven path to the substitute. Representative Dunnigan and Representative Hemingway both expressed support on the floor.
The sponsor also noted that the substitute bars lenders from charging additional fees once a borrower is put on the agreed long-term payment plan, leaving the borrower responsible for principal only. On-floor discussion stressed the bill’s goal of steering borrowers away from court toward a repayment-off-ramp.
Voting was opened and the transcript records second substitute HB292 passed the House (63 yay, 2 nay) and will be transmitted to the Senate for further consideration.
