Updated April 2, 2015
Last week, Washington passed Senate Bill 5899, altering short term lending restrictions in the state. Whether or not the new policies will benefit consumers is still up for debate.
After a surprisingly short deliberation, the bill passed by a 30-18 Senate vote. The bill - as well as the pending House Bill 1922 - is intended to "replace [payday loans] with something that's lower cost for most borrowers," according to Sen. Marko Liias (D).
Lenders in the state have supported the act, which allows for extended repayment periods. While the industry has faced setbacks in Washington, due to harsh regulation changes in 2009, this new bill will effectively enable installment loans in Washington.
Many Washington politicians on both sides of the aisle agree with Sen. Liias. Supporters feel the bill allows for emergency loans for those in need, while maintaining the protective 2009 regulations for low-income borrowers. In an interview with Seattle Weekly, Sen. Liias elaborated:
"Sure, this industry is not beyond reproach, but a lot of people don't like the fact that we have a lot of low-income folks who can't make ends meet, and so there has to be a product like this. And, at the end of the day, this is a lower-cost product."
The Columbian repports that opposition from Democratic Sen. Pramila Jayapal highlights concern in giving lenders more freedom: "We are creating a situation where people will default and will continue to put themselves in a greater and greater cycle of debt."
Some consumer-advocacy organizations are also opposed to the measure. They claim that instead of offering a more affordable solution to consumers, the bill will actually hurt poverty-stricken borrowers.
The unfortunate nature of some unsecured lending policies can lead to cycles of renewed loans. Unable to pay off rising interest rates, borrowers need to renegotiate another pay period term.
According to Union-Bulletin, this is why some spokesmen for consumer-advocacy groups such as Bruce Neas of Columbia Legal Services are speaking out. "You can't say with a straight face this is good for consumers," Neas claims.
Either way, Washington has eased what were some of the toughest payday loan policies in the nation. Just what Senate Bill 5899 will ultimately mean for lenders, politicians, and of course consumers, time will tell.
Protecting consumers from unnecessary payment policies is an important issue to our users. Check back for more details, and remember you can always call us at FindTitleloans.com for advice on the best ways for you to borrow money.Tweet
By working with our lenders, you could end up saving up to 20% on your repayment, and eliminate the risk of being taken advantage of.
Get A Free Quote! - Find out how much you can get before going to a store.