Senator's bill would cap payday loan interest rate

Senator's bill would cap payday loan interest rate

Credit: Adam Worthington

Senator's bill would cap payday loan interest rate

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by Associated Press

KTVB.COM

Posted on January 24, 2013 at 2:20 PM

Updated Monday, Nov 25 at 9:15 AM

BOISE -- A Magic Valley senator is taking aim at Idaho's payday loan industry and the high interest rates companies charge customers.

Republican Sen. Lee Heider of Twin Falls says a bill he will introduce would cap interest rates at 36 percent and force full transparency of loan terms.

Heider announced his plan Monday at a press conference with the Idaho Citizens Action Network. Heider told the Times-News interest rates on payday loans can inflate to as high as 500 percent.

Heider says he was inspired after one of his employees struggled paying back a high interest loan.

It's not the first attempt to regulate the industry. Last year, a Democratic bill to cap interest rates stalled in committee.

Idaho caps payday loan amounts at $1,000 but doesn't regulate interest rates.

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