Pennsylvania official set to propose transitional short term loans
Jun 10, 2013 Philip Burgess
Short term lending practices may return to Pennsylvania in the near future. However, the bill that is soon to be proposed would see the establishment of a short term loan program that aims to transition consumers to long term lending products, according to The Morning Call.
The source stated the State Sen. Pat Browne plans to introduce a bill in the near future that would allow consumers to take out up to eight consecutive short term loans. After that point, individuals would be offered loans with longer pay-off periods between 61 days to a year. It's aimed at helping that state's residents build a solid credit history, the source reported.
Also, The Morning Call indicated that the loan rates would be capped at 28 percent interest and would feature a 5 percent application fee.
According to the National Conference of State Legislatures, there are eight states that do not have specific laws regulating short term lending, Pennsylvania being one of them. However, The Morning Call noted that the short term industry does not operate in the state because Pennsylvania law prohibits rates on loans to exceed 24 percent.