Senate Passes Bill to Expand Short-Term Loans - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Senate Passes Bill to Expand Short-Term Loans

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OLYMPIA, Wash. - The Washington state Senate approved a plan Wednesday that would allow customers to get a new type of short-term loans.

Lawmakers in the Senate passed the idea by a 30-18 margin. Proponents say customers want more time to pay back small loans and the bill would allow minimum repayment terms of six months.

Opponents say the idea is a new form of predatory lending that would trap consumers it debt spirals. The maximum interest rate for the loans would be 36% but lenders can also add additional penalties and fees.
Companies like payday lender Moneytree supports the bill. Lawmakers approved laws in 2009 that put restrictions on payday loans.