Pay Day Loans
If you find your self in a difficult position and are in the state of Idaho, we have some good news for you. It is becoming somewhat safer to engage in dealings with pay day lenders due to the passing of a state senate bill, specifically state senate bill 1314, which was passed and signed into law by the governor in the early 2014’s. The bill reads as follows:
“PAYDAY LOANS – Amends and adds to existing law to provide that a payday lender shall not make more than two electronic representations of a borrower’s check; to provide that a payday loan shall not exceed 25% of a borrower’s gross monthly income; to provide that a lender shall obtain information on a borrower’s gross monthly income; to provide for extended payment plans and the provisions for extended payment plans; and to provide for written disclosures to a borrower before funds are disbursed.” – Idaho Legislature Source
In layman’s terms this bill was passed in order to limit the amount and ability for a pay day lender to take out of your account, specifically that the amount they can take out has been reduced to be always less then twenty five percent of the borrowers gross monthly income. It also opens further options for payment plans and even extended payment plans.
Idaho’s licensed payday lenders made 446,704 payday loans to Idaho borrowers totaling nearly $170 million, according to data provided by the Idaho Department of Finance.
Many bank regulatory agencies have issued statements over time concerning the great cumulative cost for a household of managing money through wire transfers, check cashing services, and payday lenders, which are all very expensive compared to regulated bank checking accounts, bank bill pay services, savings accounts and the building of good credit long term.
“Our objective with this legislation was to help those individuals who may be trapped in the payday loan cycle to find a way out with no further costs, interest or fees,” Sen. Heider said in a statement released July 1. “This legislation informs potential borrowers in advance of the risks associated with payday borrowing and helps them to understand their options, prior to signing. I feel this legislation is beneficial and will provide cost savings for the citizens of Idaho.”
The bill naturally received opposition from payday lenders, but a number of other interest groups, including Catholic Charities of Idaho and the Community Action Partnership Association of Idaho, opposed the bill because they said it does not offer enough protection.