House Bill 1351, the payday lending reform bill, passed the final hurdle today with the House concurring on the Senate amendments. . . . Payday loans can now be paid back in six months, rather than two weeks. Borrowers will now have a reasonable amount of time to pay back their loan without the two week time bomb constantly ticking, forcing them to take loan after loan.
HB 1351 includes an entirely new fee structure. The six month loan term and 45% APR does come with an origination fee and monthly processing fee. The borrower can pay back the loan at any time during the six month period and pay only the fees and interest due. Borrowers will pay 67% less in fees on a $300 loan[.]
From the Colorado Progressive Coalition press release.
The primary sponsors of the legislation were Representative Mark Ferrandino and Senator Chris Romer, both of Denver. The bill still needs the approval of Governor Ritter to become law.
The total financing charge will still be very high compared to any form of conventional lending, but the change is a major one and a positive one.