HELENA - Two lawmakers failed Tuesday to blast bills stuck in committees onto the Senate and House floors for debates on their bills limiting the interest rates charged by payday lending businesses.
It likely dooms efforts to crack down on payday lending businesses for two years.Sen. Kim Gillan, D-Billings, was unsuccessful at getting her Senate Bill 397 from committee to the Senate floor for debate. Her effort failed 25-25, falling one vote short of what she needed to get the bill on the floor.
In the House, Rep. Bill Wilson, D-Great Falls, was shot down on his motion to bring out his House Bill 396 for debate. His attempt drew 51 votes for it and 49 against it, missing by nine votes.
House rules require 60 votes out of the 100 members to blast a bill from committee, while Senate rules require 26 votes in the 50-member Senate.
Their bills are likely dead because Thursday is the 45th day, the halfway point in the Legislature. Any bill that hasn’t been approved by one chamber and sent to the other by Thursday is automatically dead, except for budget and tax measures.
Both Gillan and Wilson’s bills sought to cap these lending businesses’ interest at an annual percentage rate of 36 percent as 15 states have done.
Gillan said these lenders charge the equivalent of 600 percent interest on two week loans, “which robs the economy of Montana by $50 million every year.”
Sen. Joe Balyeat, R-Bozeman, opposed the motion, saying these lenders can loan only $50 to $300 per loan, a fee limited by law. The state Revenue Department charges even higher interest rates on late taxes, he said.
Under state law, the borrower’s fee is limited to 25 percent of the face value of the loan, which is limited to a maximum of 31 days.
In the House, Wilson said more than half of these loans end up in default. He said 60 percent of the payday borrowers take out a dozen or more loans from these businesses annually.
“The people are paying interest rates that in my opinion would make Tony Soprano embarrassed,” he said.
But Rep. Mike Milburn, R-Cascade, said passage of the bill would put 750 people who work for payday loan agencies out of work. Business owners said they couldn’t afford to operate if restricted to 36 percent annual percentage rate interest.
“The problem we’re dealing with is this is the only opportunity most people have to borrow some money,” said Rep. Ed Butcher, R-Winifred, adding later: “What do you want them to do? Go out and sell their bodies on the street?”
Wilson said he wasn’t trying to put the payday firms out of business. He said he offered to reduce the borrower’s fee to 10 percent, down from 25 percent, but the industry didn’t support it.
It likely dooms efforts to crack down on payday lending businesses for two years.Sen. Kim Gillan, D-Billings, was unsuccessful at getting her Senate Bill 397 from committee to the Senate floor for debate. Her effort failed 25-25, falling one vote short of what she needed to get the bill on the floor.
In the House, Rep. Bill Wilson, D-Great Falls, was shot down on his motion to bring out his House Bill 396 for debate. His attempt drew 51 votes for it and 49 against it, missing by nine votes.
House rules require 60 votes out of the 100 members to blast a bill from committee, while Senate rules require 26 votes in the 50-member Senate.
Their bills are likely dead because Thursday is the 45th day, the halfway point in the Legislature. Any bill that hasn’t been approved by one chamber and sent to the other by Thursday is automatically dead, except for budget and tax measures.
Both Gillan and Wilson’s bills sought to cap these lending businesses’ interest at an annual percentage rate of 36 percent as 15 states have done.
Gillan said these lenders charge the equivalent of 600 percent interest on two week loans, “which robs the economy of Montana by $50 million every year.”
Sen. Joe Balyeat, R-Bozeman, opposed the motion, saying these lenders can loan only $50 to $300 per loan, a fee limited by law. The state Revenue Department charges even higher interest rates on late taxes, he said.
Under state law, the borrower’s fee is limited to 25 percent of the face value of the loan, which is limited to a maximum of 31 days.
In the House, Wilson said more than half of these loans end up in default. He said 60 percent of the payday borrowers take out a dozen or more loans from these businesses annually.
“The people are paying interest rates that in my opinion would make Tony Soprano embarrassed,” he said.
But Rep. Mike Milburn, R-Cascade, said passage of the bill would put 750 people who work for payday loan agencies out of work. Business owners said they couldn’t afford to operate if restricted to 36 percent annual percentage rate interest.
“The problem we’re dealing with is this is the only opportunity most people have to borrow some money,” said Rep. Ed Butcher, R-Winifred, adding later: “What do you want them to do? Go out and sell their bodies on the street?”
Wilson said he wasn’t trying to put the payday firms out of business. He said he offered to reduce the borrower’s fee to 10 percent, down from 25 percent, but the industry didn’t support it.
