New Payday Loan Laws in Colorado

Posted On: September 1, 2010 at 1:44 p.m.

Filed Under: attorny general colorado payday loan

As legislators work to regulate the payday loan industry in many states, a number of these are being brought to the table. Currently, the discussion is about origination fees. In Colorado, a new law requires that payday loan lenders are required to pro-rate the origination fees if the borrower pays off the loan early. “Under enforcement rules adopted Tuesday by the Colorado Attorney General’s office, payday lenders cannot keep origination fees for their loans. [[ads]] The rules relate to HB1351, which narrowly passed through the Legislature during its most recent session — by one vote in each chamber. It sets limits on the fees payday lenders may impose on customers. The Durango Herald: Payday-loan critics won another victory Tuesday when the attorney general’s office adopted rules that require lenders to refund more fees when borrowers repay their loans early. A draft version of the rules caused a furor last month when critics alleged they were tilted in favor of the industry and that Attorney General John Suthers accepted more than $10,000 in campaign donations from payday-loan stores. The Colorado Independent: After four hours of testimony and deliberation in the old Supreme Court chambers of the state Capitol, First Assistant Attorney General Laura Udis decided to reverse her proposed payday lending rules and effectively reinsert consumer protections which she said are more in line with the spirit of the law passed last legislative session. Payday lenders will now be forced to refund so-called origination or acquisition fees up to $75 when borrowers repay loans” (http://www.statebillnews.com/2010/09/critics-approve-colorado-payday-loan-rules/). What effect this will have on the industry is hard to say. Certainly, though, it can be seen as a benefit to consumers who pay back their loans in a timely manner.