Short term lending limits proposed in Missouri

Missouri lawmakers have advanced a bill that would reduce the number of times consumers in the state can renew a short-term loan to three. The state House of Representatives voted 99 to 57 in support of the short term loan bill that also establishes a computer system to monitor compliance, the Columbia Daily Tribune of Columbia, Missouri, reports. People who support the bill said it would offer a form of consumer protection while also allowing lenders to continue operations in the state. Representative Mary Still said the legislation would not bring much change to the industry. Earlier this year, Still backed a bill that would have capped the interest rate for short term loans at 36 percent a year and forced consumers to wait two weeks between loan periods, the newspaper reports. The legislation that recently won approval in the House would put the maximum interest rate at 1,564 percent. Consumers would only have to wait one day between taking out loans, which can help cash-strapped people who may not be able to secure traditional financing due to a negative consumer credit report. Still told the newspaper that Missouri has the highest interest rates allowed by law and the weakest short term lender regulations. Other states, including Texas, have considered or enacted laws to cap interest rates.