Washington states House of Representatives passed a payday loan law that has been called "a balance for borrowers and lenders."

State Representative Steve Kriby said the Bill "has been carefully assembled from parts of several bills we've discussed" in a House Financial Institutions and Insurance Committee.  The "several bills" is actually nine different payday loan measures.  The Committee heard testimony on the nine measures and Kirby stated, "The legislations we passed in the House early this morning uses the best parts of those bills to craft what I believe is on eof the best payday laws in the nation."

There are several aspects of the new legislation that is set up to help both the consumers and the industry.  Some of these aspects include: payday loans being limited to no more than 30 percent of a borrower's income or $700; customer right to an installment plan if they cannot pay off the loan outright-with three months to repay loans of up to $400, and six months to repay loans of more than $400; customers who are on an installment plan or in default on a loan could not receive a new loan; and implementation of an electronic system to ensure that these restrictions are being obeyed by lenders and borrowers.

The legislation is meant to be a compromise to provide security for consumers, but allow the payday loan industry to continue to provide services.  Kirby said, "Our goal in the legislation is to preserve payday loans as an option for people who have no other choice.  This bill helps consumers tay out of trouble if they need to use the product, and it makes it easier for them to escape trouble if they inadvertently fall into a cycle of revolving debt."

Later he points out that payday loans are sometimes the only choice for certain individuals.  A lot of people don't have the option to just reach into their wallet and use a credit card to take care of short-term issues.  Payday loans provide a service that banks and credit unions do not.  By creating legislation that satisfies lawmakers but enables the payday loan industry to provide a responsible borrowing option is essential.