A Senate Committee has approved a bill that would provide a powerful incentive to make sure all payday lenders offering loans to Idaho residents are licensed.
Payday lenders provide short-term loans with high interest rates and usually cater to lower-income borrowers. Customers are supposed to repay the loan with their next paycheck. Most businesses charge about 25 percent interest.
The bill would invalidate any loan provided by an unlicensed payday lender.
Sandpoint Republican Sen. Shawn Keough told the Senate Commerce Committee Thursday that the bill would be a powerful consumer protection tool because the state Department of Finance could issue cease and desist orders and sue unlicensed payday lenders.
The bill passed with a unanimous voice vote. It now goes before the full Senate.
Payday lenders provide short-term loans with high interest rates and usually cater to lower-income borrowers. Customers are supposed to repay the loan with their next paycheck. Most businesses charge about 25 percent interest.
The bill would invalidate any loan provided by an unlicensed payday lender.
Sandpoint Republican Sen. Shawn Keough told the Senate Commerce Committee Thursday that the bill would be a powerful consumer protection tool because the state Department of Finance could issue cease and desist orders and sue unlicensed payday lenders.
The bill passed with a unanimous voice vote. It now goes before the full Senate.
