News & Resources

Short term lending reform bill in Iowa at a standstill

Apr 07, 2011 Todd Milner

According to The Iowa Independent, the Iowa Division of Banking reported that the annual interest rate on short term loans in 2009 was 292 percent. A coalition of faith-based and community groups are advocating to reduce that number to 36 percent, the news source reports. In early March, the Iowa Senate Human Resources Committee advanced a version of the short term loan bill on a nine-to-three vote. However, the bill was placed in the Iowa Senate Commerce Committee instead of moving to full Senate, and it now remains stagnant. "I believe never before has there been so much support for short term lending reform, both inside and outside of the Statehouse," Mike McCarthy, a coalition member, told the news source. According to Iowa Politics, a telephone poll of 407 registered state voters that was taken by the coalition found that 69 percent of respondents stated they would support a change in state law that would lower the maximum annual interest rates short term lenders could charge. Additionally, the poll results also confirmed that short term loan reform enjoys broad bipartisan support. Approximately 79 percent of Democrats supported lower interest rates, compared to 75 percent of independents and 67 percent of Republicans, notes the media outlet.