February 04, 2010 11:25 PM UTC

Ferrandino Ponders Payday Lending Reform Battle

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• by: Colorado Pols

We had heard previously that new legislation from state Rep. Mark Ferrandino to curb the excesses of the “payday lending” industry, an issue which has turned into a lobbyist bloodbath in recent years as the industry poured money into bitter opposition to any attempts to regulate them, was likely to be introduced later in the session–the Colorado Independent updates:

Ferrandino told the Colorado Independent he is considering trying again this year. He has worked with local consumer advocate groups to draft rough legislation but he is proceeding cautiously and is “not positive” yet whether he will actually introduce the legislation.

“If we can get through a bill this year that is meaningful and protects consumers from this predatory practice- If we think can do that, then we are going to introduce legislation,” he said. “I am up against a very strong lobbying core and they have a lot of money and a lot of influence down here. They have the ability to take any bill that is moving forward and shape it to their own interests and really stop any real reform. I want to make sure I have my ducks in a row before I go ahead on this.”

…Carlos Valverde, co-executive director for the Colorado Progressive Coalition, who has been working with Ferrandino on draft legislation, said that one way to avoid lobbyist pressures was to refer the bill to a vote of the people. One proposed draft of the legislation now is a referendum.

“We are very excited about it,” Valverde said. “We just got some polls back that said it is hugely supported between both Democrats and Republicans.”

Ferrandino agreed that a referendum might be the way to go. Lawmakers, he said, “are sometimes more willing to let the voters make that kind of a decision.”

Rich Jones, a director at the Bell Policy Center, said that his group has also been working with Ferrendino on possible legislation for this year’s session. He explained that his group would recommend imposing an interest rate cap of 36 percent on payday loans. He said similar rates have been adopted by both the federal government for Service members and their families in a number of states. In the case of the military, he said, the government has determined that payday loans were predatory and negatively affected the preparedness of the troops.

If a referred measure is what it takes to get reform of this singularly predatory industry past the gauntlet of lobbyists determined to keep the practice of charging 400%+ interest rates legal, we’re all for it. In addition to desiring revenge for the repeated spamming of our blog, we’re in full agreement with studies from the Bell Policy Center and elsewhere that show clearly what a devious economic trap “payday loans” spring on the state’s most vulnerable citizens.

For the record, though, if it’s decided to go ahead and pass these reforms through the legislature, and we have to publicly, each and every day list the names, lobbyist contacts and bad excuses of every legislator who opposes reforming this predatory business–what we used to call usury that now infests virtually every strip mall in the state–we’re prepared to do that. In our opinion, this is both morally and politically the right fight for both sides of the aisle: anyone worried about the well-being of their constituents in hard economic times, and that should be everyone.

Somebody let Rep. Ferrandino (and anybody else, from either party, who tackles this) know we’ve got his back, okay? Bring it on. And stop spamming us.