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Payday loan revamp moves forward in Senate

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With one lawmaker pointing to a “conundrum,” the Senate Appropriations Committee on Thursday approved a bill (SB 920) that would allow payday lenders to make larger loans for longer periods of time.

The proposed changes have drawn heavy debate in the Senate and House, where a similar measure (HB 857) has been moving through committees.

The bills, backed by the payday-loan industry, would allow loans up to $1,000, with repayment over 60 to 90 days.

Current law limits the loans to $500 for periods of seven to 31 days.

Supporters say the changes are needed because of federal regulations proposed to take effect in August 2019 on the types of smaller-dollar, shorter-term loans made by payday lenders in Florida.

Supporters also say payday loans are important for low-income people who do not have access to other credit, while opponents of the bills say the high-interest loans hurt consumers.

Sen. Dennis Baxley, an Ocala Republican who voted for the bill Thursday, described the situation as a “conundrum” as lawmakers decide how to handle the issue.

But Senate Appropriations Chairman Rob Bradley, a Fleming Island Republican sponsoring the bill, said he thinks the proposal achieves a balance and that the state has to acknowledge the need for a short-term credit market and properly regulate it.