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Proposed short term lending legislation may bring Missouri more in line with Florida

May 10, 2011 Kyle Duncan

Proposed short term lending legislation may bring Missouri more in line with Florida
After a House-passed short term lending bill failed to advance through the Missouri Senate, two state senators announced their intention to write a bill in order to balance consumer protection with the industry's need to remain profitable, according to the Columbia Daily Tribune.
 Missouri allows the highest short term loan fees in the nation, permitting lenders to renew loans - and charge fees - up to six times, as well as letting borrowers take out new loans immediately after repaying previous debt. Typically, lenders in the state charge up to $20 per $100 borrowed when a loan is initially issued, as well as each time it is renewed. According to Republican Senator John Lamping - the representative for the Ladue suburb of St. Louis, Missouri, who is working on the bill with St. Louis representative Senator Joe Keaveny - the law would emulate Florida's short term lending legislation. In Florida, fees are limited to $10 per $100 borrowed, renewals of loans are prohibited and lenders must wait at least 24 hours after collecting debts before borrowers are allowed to take out a new loan. Lenders are required to report all loans to a statewide database as a way to ensure that regulations are being followed. State figures indicate that the average short term loan written in Missouri charges interest of $17 per $100 borrowed - an APR of 445 percent, according to the Kansas City Star.