By a slim margin of 1 vote the Colorado Senate passed new limitations on payday Loans.  Having passed the Senate hurdle the bill heads back to the house who are expected to approve this latest version quickly.

While supporters of this bill tout that it will help protect vulnerable consumers from growing debt, opponents argue that the bill will cost jobs in the financial sector and remove one of the few credit sources available for people with little or bad credit.  They suggest that this lack of credit sources has a chance to increase foreclosures and evictions for consumers strapped for cash as well as increase the need for government help.

The new bill would require lenders to allow repayment up to 6 months after the loan and allow for the flexability for repayment of loans sooner.  Lenders would be allowed to charge $75 with flat fees and/or annual interest for each month past the first.

Sen. Lois Tochtrop of Thornton disagreed with sponsors of the bill saying that this bill would create an opportunity for organized crime step into the place once filled by legally controlled lenders.  She suggested that in the end this would create much greater hardships on the end consumer saying, “They’re going to have broken legs and they’re not going to have the money to get those fixed.”