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.