Midwest Voices

Barb Shelly

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(I update this in a separate post. While the discussion referenced below was interesting, it seems it wasn’t as fair and open as I had first thought.)

The payday loan bill in front of the Missouri House is deeply flawed, but it provided the vehicle for an excellent debate this afternoon.

Democratic Rep. Mary Still of Columbia, who has spent three years researching the issue and trying to be heard, made her case for real reform.

Democrat Ed Schieffer of Troy weighed in with a personal story. A family member who struggles with a mental illness goes on shopping binges and uses payday lenders to finance them. His parents have had to dip into their savings to help pay the debt once the interest rates and penalties soar.

“I pray that we can come up with a compromise that will truly take care of payday loans and help people who can’t help themselves,” Schieffer said.

Supporters of the industry had their say, too, defending payday loan shops as a necessary safety net for people in tight spots who can’t get loans from banks.

In the end, House Bill 656 was set aside for action later. As written, it does almost nothing to diminish Missouri’s status as one of the nation’s most friendly states for payday lenders.

It lowers the cap on the annual percentage rate on a loan to 1,564 from 1,950 — a meaningless dip because the average short-term borrower in Missouri now pays an annual percentage rate of 444 percent. And at 1,564 Missouri’s APR would remain the nation’s highest.

Still, who has tried unsuccessfully to introduce bills capping the annual percentage rate at 36 percent, proposed a compromise amendment trying for a cap of 99 percent. That at least would be lower than the state’s current average. No vote was taken on the amendment.

The Missouri House is so GOP-dominate that I suspect the ineffectual version of the bill will pass. But I give the Republican leadership credit for allowing an open debate this time around.

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