Supporters of the bill say it's a step in the right direction, providing protection for consumers but still allowing payday lenders to operate.
Nixon disagrees. In his veto message, Nixon said "payday lending often perpetuates an endless cycle of debt for consumers who can least afford it, and this bill fails to protect Missourians from being caught in this downward spiral."
Communities Creating Opportunity, a faith-based community organizing group, applauded Nixon's veto, calling it a "major victory" for the state's working poor and faith community.
Under the current law, short-term loans for between 14 and 31 days and up to
The bill would have banned consumers taking out a new short-term loan instead of paying off the previous one. It also required lenders to offer "extended payment plans" to a borrower. No additional interest or fees could have been charged during the extended 60- to 120-day payment period. Borrowers would only have been able to get one of these deals in a year.
Additionally, the bill capped interest and fees on a loan at
The bill passed the House 112-39 and the
"Missourians want meaningful payday lending reform, not a sham effort at reform that allows such predatory practices to continue," Nixon said.
(c)2014 the St. Louis Post-Dispatch
Visit the St. Louis Post-Dispatch at www.stltoday.com
Distributed by MCT Information Services