Many Missourians facing hardship turn to short-term loans to help them meet their financial needs until their next paycheck arrives. Payday loans must often be repaid in 14 days and they come at a price.

Rep. Steve Helms

A state House committee is considering whether to restrict payday loan fees and interest at 35% of the amount of the loan – a reduction from the current 75% threshold. State Rep. Steve Helms, R-Springfield, is sponsoring a bill that he hopes addresses what he says are the most egregious issues of such lending practices.

“I’m trying to strike a balance where you can keep the industry there viable and moving forward because guess what – folks that have bad employment and bad credit, they need somewhere to get these loans,” Helms says.

The bill would not go as far as capping interest rates themselves – rates that Mark Rhoads, an industry lobbyist, says average 400% annually.

“We have always argued that an APR, an annual percentage rate, on a 14-day loan, is just not an appropriate way to look at interest rates,” Rhoads says.

Rep. Rory Rowland, D-Independence, says changes to such loan practices are overdue.

“For us to have not taken action for many, many years. To be 2018 and not take action, I think is just reprehensible,” Rowland says.

Rep. Rory Rowland, D-Independence

He says the industry has a black eye.

“We’re dealing with clientele that has tremendous debt loads, or problems and things like that. I cannot, in good conscience, say that it’s not predatory lending when we’re talking about 400% interest. I just can’t in good conscience look myself in the eye, when I look in the mirror, and say that this is okay,” Rowland says.

Industry representatives are reviewing new changes made to the bill and have not taken a public position on the legislation.

The measure would also:

*Change the number of times a borrower could renew a loan from the current six times down to two

*Reduce the annual licensing fees from the current $500 down to $300 per payday lending location

*Allow an extended payment plan to be used by some borrowers