News & Resources

Iowa short term lending bill advances in Senate

Mar 02, 2011 Todd Milner

A bill that would cap interest rates on short term loans in Iowa at 36 percent recently passed a state Senate subcommittee. A similar bill proposed in 2010 died in a House subcommittee. Currently, Iowa has 231 short term lending outlets, the Iowa Independent reports, and issued an average of 11.88 loans per customer in 2009. The legislation comes amid a flurry of activity by states to change the way short term lenders do business in their areas. In Mississippi, Governor Haley Barbour recently signed a short term lending bill that will go into effect on January 1. While that new law will change the interest rates lenders can charge for the loans, the legislation also allows the companies to operate in the state for at least three more years. Kentucky recently killed a bill that would have capped short term loan interest rates at 36 percent there. A senator in Arizona is trying to give consumers another short-term financing option, after fellow legislators passed bills that made it virtually impossible for short term lenders to operate in the state.