Kansas proposal would set interest rate cap on payday loans

Posted at 3:08 PM, Oct 12, 2017
and last updated 2017-10-12 16:08:46-04

 TOPEKA, Kan. (AP) -- Kansas lawmakers are proposing a bill that would set a maximum interest rate for someone taking out payday or other short-term loans.

   The Wichita Eagle reports that a special legislative committee met Wednesday to consider the bill, which would cap the annual interest rate at 36 percent. Supporters say the limit would help borrowers who are caught in a cycle of debt and are unable to get out.

   Opponents say the bill would effectively eliminate the payday loan industry and limit a source of credit used by many Kansas residents.

   The Kansas Office of the State Bank Commissioner says more than 60 companies in the state provide payday and title loans at more than 300 locations.

   The committee didn't make any recommendations on the proposal Wednesday.