BATON ROUGE, La. (AP) — Senators have advanced a proposal that would limit the number of payday loans a borrower can take out annually.
The Senate Finance Committee approved the bill Wednesday, despite opponents who argued it would shut down the storefront lenders.
The proposal by Bogalusa Sen. Ben Nevers would put a cap of 10 payday loans per year per borrower. Payday lenders would be required to record transactions in a database to ensure the cap.
Supporters of the measure originally wanted a cap on the fees that could be charged on the short-term loans with high interest rates that critics say cause a cycle of debt. But they say Nevers' rewritten bill still represents progress.
The bill moves to the full Senate for consideration.