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Senate committee hears push to raise Washingtonsmall-loan cap to $1,200, with strong public opposition
Summary
Lawmakers and witnesses debated SB 6,250, which would raise the statutory cap on small "payday" loans from $700 to $1,200 and index it to inflation beginning in 2027. Supporters say the update reflects inflation; opponents warn it would deepen cycles of debt and harm low-income and military borrowers.
Senate Business, Trade and Economic Development Committee members on Jan. 29 heard hours of public testimony on SB 6,250, a bill to raise Washington's statutory maximum for certain small loans from $700 to $1,200 and to require the Department of Financial Institutions to adjust that cap annually for inflation beginning in 2027. Prime sponsor Senator Claudia Kaufman presented the bill as an update to reflect modern costs while preserving existing borrower protections.
Kaufman told the committee the measure is intended "to make sure people who rely on small loans have access to regulated transparent options," and said the change is not meant to encourage additional debt.
Supporters from the industry argued the cap has…
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