OLYMPIA, Wash. - Bills to expand payday lending options in Washington have emerged from House and Senate committees, despite objections from advocates for low-income borrowers, seniors and the Washington attorney general.
The bills, HB 1922 and SB 5899, would create a new type of six- to 12-month installment loan for amounts up to $1,000. The lender gets a 36-percent interest rate, an origination fee of 15 percent of the loan amount and a monthly maintenance fee of 7.5 percent.
Add it up, said Marcy Bowers, executive director of the Statewide Poverty Action Network, and the result is a more expensive loan without the protections of the state's current payday lending law.
"They're saying that this would get rid of payday lending - which it would, technically," she said. "It would just replace it with something that's confusing and expensive, and would be better for payday lenders, but not better for consumers."
Bowers said the payday-loan industry has backed similar legislation in other states that have tried to set tougher limits on what they can do and charge. Washington added safeguards for payday loan customers in 2013. State Attorney General Bob Ferguson said borrowers don't need a new type of loan, and the state's payday lending law doesn't need an overhaul.
More than 70 consumer groups have signed a letter opposing the new type of installment loan, including AARP Washington. Mike Tucker, its volunteer president, said they took a stand because, statewide, one in five payday loans is taken out by someone age 55 or older.
"Let's recognize that a significant portion of the population of seniors are living on fixed incomes," he said. "And so, it's not surprising to me that the numbers for seniors using payday loans is as high as it is here in the state of Washington."
Last month, Tucker told a Senate committee that AARP research has shown that the more debt people have, the more difficulty they have making financial decisions and resisting scams.
The bills to create the new installment loan are now in the Rules Committee.
Text of the legislation is online at apps.leg.wa.gov.
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Lawmakers in Olympia this session moved to add more protections for consumers against predatory loans.
Washington state lawmakers passed Senate Bill 6025 unanimously in both chambers, closing a loophole companies were using to evade caps on the amount of interest charged on loans.
Sam Leonard, an attorney in Seattle, said tech companies providing financial services such as loans would charter out of state banks, especially in Utah, where lenders can charge unlimited interest rates.
"These fintech lenders a lot of times will charge 150, 200% interest on relatively small dollar loans, $3,000, $5,000 and the like," Leonard explained.
Washington state has a set of protections called the Consumer Loan Act to shield people from predatory loans. Leonard said capping interest rates at the federal level would help people across the country.
However, he emphasized the bill goes a long way to increase protections for Washingtonians.
"Not a lot of states at this time have passed similar legislation," Leonard pointed out. "Washington is out in front of the curve with regard to protecting low-income Washingtonians or other Washingtonians that might enter into these predatory loan products."
Leonard added the issue with predatory loans is they keep people in continuous debt cycles.
"Loan products like these essentially strip low-income individuals' ability to improve their economic situation," Leonard noted.
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While there's snow in the immediate forecast, the spring storm season has arrived in Minnesota and state officials said with complaints related to homeowner insurance claims on the rise, it is important to monitor changes in policies.
The Minnesota Commerce Department said complaints from policyholders, largely stemming from their claims being denied, have more than doubled since 2020.
Julia Dreier, deputy commissioner of insurance for the Minnesota Department of Commerce, said under a changing climate, the nation is seeing plenty of extreme weather events resulting in wind and hail damage, and insurance companies are adjusting to what's happening.
"Insurance costs are going to increase," Dreier pointed out. "We do want to make sure that Minnesotans are prepared."
As some carriers narrow what is covered or require higher deductibles, Dreier urged consumers to carefully review their policy when it is up for renewal, to avoid surprises when they have to file a claim. The department acknowledged changes can slip under the radar when consumers rely on paperless statements sent via email, or with busy schedules preventing them from reading all the fine print in documents they receive.
The department emphasized it is a complicated process in getting complaints resolved, noting some can be partially reversed in favor of the homeowner. Dreier noted they work closely with the industry to make sure a company's actions are within the letter of the law.
"One of our jobs is to make sure that insurance companies aren't doing something unethical when they're submitting their policy forms to us and their rates to us for review," Dreier added.
The department does have a new video on its YouTube channel, which offers more details on how to better prepare yourself ahead of any future claims, including knowing whether your policy offers flood protection and assessing the value of items in your home.
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Wisconsin has announced a big development in trying to establish more digital equity around the state.
Gov. Tony Evers and the Public Service Commission say Wisconsin's blueprint for digital equity has been accepted by the National Telecommunications and Information Administration.
That means the state is eligible for up to $30 million to implement its approach over the next five years.
Martha Cranley - state director for AARP Wisconsin - called it a robust plan, noting that older populations continue to face challenges in being connected to the digital world.
"We know that at least 15% of people 50-plus in Wisconsin are not connected," said Cranley, "either because the wires simply don't come to their house, or they don't have a device, or they don't know how to use it."
Cranley said the lack of connection is especially concerning in rural areas across northern Wisconsin, where aging communities have limited resources.
Stakeholders also note an infusion of new aid is helpful with the federal government's Affordable Connectivity Program - which provides discounts on monthly internet bills for eligible households - in danger of running out of money.
Cranley said the state's plan came together following extensive public outreach, in which her organization helped convey the need for improved internet access for those 50 and older.
"They certainly heard from older people about how important this is to connect to their doctor," said Cranley, "and to connect to government services, and frankly, find employment."
Overall, Evers says the plan's federal approval means more than 410,000 homes and businesses will be better positioned to be connected to new or improved high-speed internet service.
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