Colorado short term lending bill nears reform

A heavily debated short term lending bill is en route to the Colorado House of Representatives, where lawmakers will discuss whether or not to reform a short-term lending bill that passed through the chambers in 2010. The Colorado Statesman reports that a key piece of the new legislation moves to redefine how much of the origination fee is required to be paid by the borrower. Under the 2010 legislation, borrowers only had to pay a prorated amount of the origination fee if the loan was reimbursed early. Now, legislation calls for the entire fee to be paid. One lawmaker is not pleased with the new legislation. "[The legislation] basically guts the intent of the bill. One of the main reasons that we [made origination fees refundable] is that it disincentivizes the lender to churn the loan," state Representative Mark Ferrandino told the Colorado Independent. Currently origination fees on the books in Colorado include $20 per $100 for the first $300 borrowed and $15 per $100 for the next $200. Borrowers can repay the origination fee any time between two weeks and six months after the loan has been received.