Despite the fees and interest that sometimes accompany short term lending
, many consumers choose to pursue this avenue when faced with an unforeseen expense. When individuals need fast cash to cover an emergency, they often rely on lenders to provide financial security. The recent passage of House Bill 2191 in Pennsylvania's House of Representatives might give citizens more safe options to borrow. More lender options
According to the Patriot News, the measure passed in the house on June 6 on a 102 to 90 vote. HB 2191 would require all lenders to become licensed, a provision which Ross told the source would make borrowing safer, as many Pennsylvanians currently take loans from out-of-state and internet lenders. Should the bill be signed into law, companies would be able to offer two week long loans, according to Section 5112, Part 13, Paragraph A of the bill. The legislation designates that the deferment period of a short term loan cannot be less than 14 days or longer than 60. Also included in the legislation are regulations on finance charges, the amount that can be loaned and the number of lenders that can be used by citizens. Those opposed to the bill believe the passage would make it easier for lenders to charge exorbitant interest rates on loans, which may adversely affect consumers. However, The Levittown Patch reported, the supporters of HB 2191 explain instilling further regulations would allow more protections for individuals looking to borrow money, particularly for internet lenders. "I think we have done what we can to provide a safe and reasonable alternative for those who are caught short," Ross said, as reported by the Patriot News. On to the Senate
The bill will now move on to the Senate for debate and vote. Should HB 2191 pass, lenders would have to consider changing some tactics. For example, because of a provision in Section 5115, a company could not be located within 1,000 feet of a racetrack, casino and a military base. They would also no longer be able to offer another loan to a consumer who paid back an outstanding sum that same day, among other rules. There are multiple ways businesses could profit from the passage of the bill. According to Section 5120, Part A, Paragraph 2, if a borrower's repayment cannot be processed due to insufficient funds, lenders are allowed to charge a fee of $25, in addition to the missing amount. However, these changes may not become a possibility until the fall. Philadelphia's CBS affiliate, KWY-TV, reported the bill may not be discussed before Senate adjourns for the summer.