Colorado voters urged to make payday loan decision in upcoming election.
Proposition 111 sets a cap on the interest rate on these short-term loans.
It also eliminates all other fees in addition to this interest rate.
You can imagine how getting a short term loan with a huge interest rate and upfront fees could end up backfiring on you, putting the borrower in a bigger and bigger hole.
Proponents of 111 say these loans are predatory and people need to be protected.
Opponents say this is unnecessary babysitting and will completely eliminate the option of these short term loans.
At a rally on Tuesday morning, a group of veterans said our servicemen are particularly targeted by recovery locations.
Once a borrower receives the loan, he or she can move from a difficult place to a more difficult place.
“I support good business, but this is a company with bad business practices and preying on people who already have bad luck,” Democratic Representative Tony Exum Sr. explained in support of 111.
Moving limits the amount someone pays to borrow. If the bill passes, the annual percentage rate, or APR, is capped at 36% and eliminates any loan fees or charges.
“We have to get this through and then ask ourselves if 36% is reasonable, but 200% is outrageous.” Rep. Exum Sr. added.
While some claim the current RPA cap is outrageous, one opponent of 111 says it’s our right to make the decision for ourselves.
“So the reason the interest rates are so ridiculously high is that these are people with terrible, terrible credit scores and if they are in a position where they need a loan for one week is an option, “said Jon Caldara, president of the Institute of Independence, against 111.” It’s not a good option, I don’t think they should take it, but they should have a choice. “
Caldara says if this passes, these payday loan businesses will collapse.
“The idea of Proposition 111 is that we smart people have to save the stupid poor from their own bad decisions,” Caldara said. “We will therefore ban the practice of payday loans.”
The ballots were mailed statewide on Monday.
Proposition 111 will read on your ballot as follows:
Will there be an amendment to the Revised Colorado Statutes regarding the limitations on payday lenders and as part of this reduction of allowable charges on payday loans at an annual percentage rate not exceeding thirty-six for hundred ?