JEFFERSON CITY, Mo — The payday loan industry might be seeing some big changes in the state of Missouri if legislation moves successfully through the General Assembly.
Bills before the state House and Senate would place new restrictions on the lending practices of payday loan industry.
Following a model adopted by the state of Florida, legislators are looking to carefully cap and monitor the industry, rather than outlaw it altogether as some other states have done. New legislation in the House would cap loans at $750, limit interest rates, and prohibit a burrower from having more than one outstanding loan at any time.
A similar bill, albeit with a different cap, exists in the Senate.
Jessica Hodge, president of Hodge Consulting LLC, has lobbied on behalf of the new restrictions for several years. She said that the new policies are in place in 13 other states. In Florida, she said, it has changed the way the payday loan industry looks and has made it “much more effective.”
“In Florida, where this program exists, these payday loan places if you see them from the outside, they look like banks, they aren’t these eyesores,” Hodge said.
The new regulations would prevent an individual from having outstanding loans at multiple lenders, and is opposed by the industry as an additional burden that could ultimately kill their business. But proponents like Hodge say it makes the industry better and actually improves overall quality.
“It still gives an avenue to people who need it,” Hodge said. “But it also takes away most of the problems.”
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