Banking Law

A cadre of Colorado legislators set out on a jihad earlier this year to eradicate the stink of payday lending from the pristine air of the Mile High State. They vowed to drive the bottom-feeding, blood-sucking, tobacco-spitting varmints back into their burrows and make the world safe again for those lenders to folks on the margins who have a historical right to that kind of business.

People like this guy:

Or this guy:

Or even worse, THIS GUY:

The solid solons introduced legislation to accomplish that crackdown and had some early success. Opponents rightly noted that the law would likely put regulated payday lenders out of business.

"Where are these people going to go if these financial providers are no longer in the community?" asked Rep. David Balmer, R-Centennial.

Where they went wasn't the point. The point was that people who patronized payday lenders were too irresponsible to fend for themselves, so the legislature had to fend for them.

Rep. Terrance Carroll, D-Denver, said whether or not the payday lending industry survives is beside the point.

"This is about our moral obligation to protect the most vulnerable members of our society from predatory lending," Carroll said.

Take that, Balmer, you amoral SOB!

The bill narrowly passed the House and made it out of a key Senate committee intact and passed a first reading. The missteps of Internet payday lender Sonic Cash even gave the impetus for the legislation a little PR boost.

Then all hell broke loose.

Opponents started sticking amendments to the bill like bankers stick "Kick Me" signs to the back of Sheila Bair. Soon, the bill looked like any other piece of legislation: the inside of a sausage casing.

Crying "Foul!" (or simply crying), the bill's sponsors are rolling up their campaign and taking their hurt feelings back to their offices, where young interns are expected to suffer the severe punishment meted out to the innocent when the guilty are frustrated.

Sponsors said Tuesday that they plan to kill a bill that would have restricted the payday lending industry in Colorado, saying the bill no longer does what was originally intended.

House Bill 1310 would have capped the interest rate on a payday loan at 45 percent, cut lender fees and imposed a 30-day minimum repayment period, sponsors said.

But amendments added onto the bill would have allowed "endless loan fees" and set a seven-day repayment period, "making it even harder for borrowers to get out of the cycle of debt," sponsors said in a statement.

"We are killing this bill because as amended it no longer protects hardworking Coloradans," Senate President Peter Groff, D-Denver, one of the bill's sponsors, said in a statement. "The bill as it sits now protects industry profits that are garnered with interest rates that average more than 350 percent. That just isn't right."

"We began this effort to rein in excessive fees earned on the backs of hardworking Coloradans," said Rep. Mark Ferrandino, D-Denver, the bill's other primary sponsor, in a statement. "The amendments to the bill actually make the situation worse for Coloradans."

Imagine a bill intending to help actually making things worse for its intended beneficiaries! What is this world coming to?

Well, there's always next year.