PROVIDENCE, R.I. (WPRI) – The House sponsor of a last-minute bill on payday loans withdrew the legislation Wednesday amid opposition from General Treasurer Seth Magaziner and critics of high-interest lending.
The bill, sponsored by Sen. Frank Ciccone and Rep. Scott Slater, “would permit a borrower and a licensee to agree to interest and fees charged by the licensee if disclosure is made,” according to a summary. The House version was withdrawn Wednesday at Slater’s request.
“He withdrew it because there was confusion over the intent of the bill,” House spokesman Larry Berman told Eyewitness News. “It’s late in the session and he felt it would be more appropriate to withdraw the bill, continue to work on it and reintroduce it next year. … His intent was to make loans less onerous.”
The bill was originally introduced in the House on June 14 and in the Senate on June 21, long after the official deadline to propose new legislation. Committees in both chambers held hearings on the bill in the last week, but neither has voted to send it to the floor yet.
“Every year we have legislation proposed to eliminate payday loans, which – payday loans, I have concerns about as well,” Slater, D-Providence, said at a June 20 hearing on the bill. “As much as sometimes I might disagree with folks taking payday loans, I hear from constituents on a regular basis that they need access to capital.”
He added: “I think anytime we take up these loan products, folks look for boogeymans in the legislation, but this is just mainly a disclosure act.”
But Magaziner’s office had urged lawmakers to reject the legislation, arguing it would allow payday loans with even higher interest rates than the state’s current 260% maximum.
Deputy Treasurer Kelly Rogers, who testified against the bill in the House, sent a letter to senators Tuesday that argued the current version of the legislation “would effectively eliminate Rhode Island’s usury limits which already allow annual percentage rates as high as 260% for certain types of small dollar loans.” She said it could also exempt lenders from consumer-protection laws.
Added Magaziner spokesman Evan England: “It would effectively remove the term restrictions on loans as long as the borrower is told the conditions and signs on the dotted line.”
Also testifying in favor of the bill in the House was Nick Hemond, a lobbyist for Axcess Financial, an Ohio-based company that owns brands including Check ‘n Go and Allied Cash Advance.
The Senate Commerce Committee held a hearing on the bill Tuesday but has not had any of its meetings recorded and uploaded to the Capitol TV website so far this year.