Lawmakers hear payday loan regulation bill

Posted at 6:35 PM, Feb 21, 2017
and last updated 2017-02-21 19:36:21-05

A bill to regulate the payday loans industry in Nebraska was in front of a legislative committee on Tuesday.

LB 194 would cap the annual interest rates for payday loans to 36% and make the monthly payments no more than 5-percent of your gross income.

Several speakers talked about their struggles to get out of the so-called cycle of taking out one loan to pay another.

However those against this bill say it would be a death sentence to the payday loan industry in the state.

The AARP did a survey that revealed that more than three-fourths (77 percent) of Nebraskans age 18 and older support changes in state law to prohibit annual interest rates above 36 percent. More than half of Nebraskans (59 percent) have a very or extremely negative opinion of payday lending institutions.

Nebraska is among 36 states that permits payday lending. A payday loan is a short-term loan, typically for $500 or less. Current state law allows Nebraska’s 87 payday lenders to charge borrowers up to 461 percent annual interest.