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Bill to increase cost of Colorado short term loans killed

May 20, 2011 Todd Milner

Colorado House Bill 1290, which would have removed a provision that allows borrowers to receive a pro-rated refund of paid fees when taking out a six-month loan was recently defeated by the Senate Local Government Committee, according to the Colorado Independent. Committee members said that they did not want to increase fees on people already making credit decisions under financial strain. Currently, borrowers who pay off a loan in 30 days will pay an annual percentage rate of 86 percent. The new legislation would have increased the fee to an APR of 289 percent. Borrowers holding a 180-day loan under either the proposed or current law will pay 162 percent APR. In New Hampshire - a state where short term loans and title loans were effectively banned in 2009 as a result of annual interest rates being set at 36 percent - a bill to revive short term loans was recently re-referred to the New Hampshire House Commerce Committee, according to the New Hampshire Business Review. The House of Representatives recently passed House Bill 57 by a narrow margin of 180-171, resulting in title loans being re-allowed by the state. However, the short term loans bill failed to pass, and a subsequent attempt to kill it also failed.