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Committee hears competing views on raising small‑loan cap to $1,200
Summary
Supporters of HB 2361 say increasing the small‑loan cap to $1,200 (indexed to inflation) reflects modern emergency costs and preserves statutory safeguards; opponents, including AARP and SEIU 775, warned it will increase costs for low‑income and fixed‑income borrowers and deepen debt cycles.
The Consumer Protection and Business Committee heard testimony Jan. 27 on House Bill 2361, which would raise the statutory maximum principal for small loans from $700 to $1,200 and index that cap to inflation beginning Jan. 1, 2027, subject to a 30% of gross monthly income cap if that is lower.
Staff explained current statutory protections: a $700 cap, an 8‑loan limit per 12 months across all licensees, a one‑time fee structure that results in a 15% flat fee on the first $500 and 10% on amounts above $500, and an…
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