A bill brought to North Dakota’s House that would lower the maximum fees and lending amounts on payday loans was defeated on Tuesday by an overwhelming 88-5 vote. The bill was looking to cut the fees from 20 to 15 percent, reduce the maximum loan amount to $250, and put a $300 limit on what an individual could borrow from a payday loan company. The current limit is $600.
Luckily, the House voted to defeat the bill. The state currently has pretty strict regulations on the payday lending industry, and recognize the industries technology and policies on spotting borrowers that may be over borrowing.
Ed Gruchalla, representative for Fargo, North Dakota, stated that the cost of payday loans are often cheaper than the overdraft fees that a bank charges. This is particularly poignant due to the fact that there has been recent talks of plans to urge banks and credit unions to put these companies “out of business”. The ability of an individual to get a payday loan and then paying that loan back on their next pay check is a great benefit. Instead of having a forced fee, they are able to decide what is financially best for them,and then make an informed choice to be a responsible borrower.
It appears that North Dakota representatives understand the needs of their citizens and are looking to encourage responsible borrowing instead of taking away viable financial options. Enabling payday loan companies to continue a successful and helpful business is one way of showing this. Excellent decision!
