With only three days left in the special legislative session, a controversial proposal backed by Seattle-based payday lender Moneytree advanced another step in the state Legislature today. It was one of five policy bills moved by the Senate Rules Committee along with the Senate budget.
The bill could come up for a floor vote as early as this afternoon.
Critics of Senate bill 5312 are crying foul, saying the proposal is an end-around previous payday lending reforms that reduced predatory lending and shouldn’t be part of budget negotiations.
The bill would allow lenders to make a new type of loan of up to $1,500 with effective interest rates topping 200 percent. The installment loans would have repayment periods from six months to 18 months.
Currently, payday lenders can lend up to $700 and those loans have to be repaid on the borrower’s next payday.
Sen. Sharon Nelson, D-Maury Island, has been one of the most vocal opponent of the bill since it was first introduced in January. She said she disagrees with the Majority Coalition Caucus’ claim that the bill is a necessary jobs bill.
“That’s just not the case,” Nelson said.
Nelson said that the “harmful effects of predatory lending” would offset any jobs that would result from the legislation.
“Right now all we should be dealing with is the budget of the state of Washington,” she said.
The other policy bills moved out of the Senate Rules Committee today were: A bill relating to worker’s compensation settlements, a bill that would cap non-education spending, a proposal regarding toxic cleanup projects and a bill that would give school principals veto power over which teachers are assigned to their schools.
Jim Richards with Statewide Poverty Action Network said he was surprised to see “the Moneytree bill” included among the Majority Coalition Caucus’ priority bills. Richards also echoed Nelson’s concerns.
“Apparently allowing one company to increase its predatory lending that preys on the working class and on the poor is more important than passing a state budget,” Richards said.
Sen. Steve Hobbs, D-Lake Stevens, is the prime sponsor of Senate bill 5312.