Bill Regulating Payday Loans Has Odd Foes

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TALLAHASSEE -- It may seem odd, but Florida consumer advocates are urging the Legislature to kill a bill that would regulate the state's virtually unregulated high-risk lending industry known as the payday loan business.

Sen. Skip Campbell, D-Tamarac, said his bill that passed the Senate last week would be the strictest of any law he's seen regarding the payday loans, which provide customers cash if they write a post-dated check that the lender doesn't cash until after the customer passes a payday. The lenders typically charge a fee for their services ranging from 6 to 25 percent of the loan.

Campbell's bill, which still needs House approval but could be voted on today, would cap the interest on a payday loan at 10 percent, and limit the loan amount to $500. In addition, Campbell's bill would restrict the length of the loan to 21 days and forbid payday lenders from making rollover loans in which they hook customers by making them consistently costlier loans to pay back other outstanding payday loans.

"It's the strongest bill in the country," Campbell said yesterday. "It's no more than 10 percent. That's all it is, 10 percent, and 50 bucks is all you'll pay."

But consumer advocates are hoping the House will not even consider Campbell's bill on the final day of the session today. They say the bill does not actually prevent rollovers and, worst of all, legitimizes an industry they claim uses flashy advertisements and fast-cash promises to engage desperate consumers into an endless series of increasingly expensive loans.

"The bottom line is that this bill legalizes an industry that exploits the poor," said Doreen Priolo Barker, a legislative advocate for Florida Legal Services Inc. "These people get on a treadmill of loans and they eventually have to file bankruptcy."

The payday loan industry has also been under fire by military officials, who say the industry intentionally hooks young, low-income, naive sailors who have overspent their budget. Several military officials from Jacksonville and other areas have come to Tallahassee seeking strong regulation of the payday loan industry and have said they do not feel the Campbell/Barreiro bills go far enough to protect consumers.

Campbell said his bill prevents rollovers by prohibiting payday lenders from making a second loan to a consumer until the first loan is paid back. …