A proposal that would allow payday loans for longer periods of time and larger amounts of money cleared its second Senate committee Monday.
The Senate Commerce and Tourism Committee approved the bill (SB 920), filed by Appropriations Chairman Rob Bradley, R-Fleming Island.
The bill would allow “installment” loans up to $1,000, with repayment over 60 to 90 days.
Current law limits the high-interest loans to $500 for periods of seven to 31 days.
Backers of the bill say it is needed because of federal regulations slated to take effect in August 2019 on the types of smaller-dollar, shorter-term loans made by payday lenders in Florida.
Also, supporters say the industry plays an important financial role for many low-income people who do not have access to other sources to borrow money.
“I think these loans provide a valuable service to individuals on a short-term basis, which is the way they were intended,” Sen. Kelli Stargel, R-Lakeland, said.
But some consumer advocates are fighting the bill. Alice Vickers, an attorney for the Florida Alliance for Consumer Protection, said she is concerned the bill would allow $1,000 loans, which could be difficult for low-income people to pay back with interest charges.
“That is an easy debt trap to fall into by doubling these loans,” Vickers said.
The bill, which has also been approved by the Senate Banking and Insurance Committee, will next go to the Rules Committee.
The House version (HB 857) has been approved by one panel.
News Service of Florida