Republican sponsored Senate Bill 242 aims to curb predatory lending for companies that extend payday loans. And while the bill still needs approval from Governor Sandoval, local officials say it would be beneficial for those who are in the market for a loan.
In 2014, the Better Business Bureau says payday loans were on their top 100 list for inquiries in the loan industry and almost made the top 100 for complaints.
President and CEO of the Better Business Bureau, Tim Johnston says, “This really puts into law what’s going to be required best practices. That they are transparent, that they are given full disclosure not only in what the terms are, but any types of fees that are associated with that loan.”
Officials say many people request loans only to find themselves owing more money than they realized, which can create a snowball effect and lead to debt.
“When you have different things, or different agencies or different businesses clawing money from your account,” says Johnston. “It can really start to cycle out of control.”
And while some may thing filing requests online is more convenient, Johnston says it can actually cause more harm than good.
According to Johnston, “You don’t know who you’re dealing with, you’re giving information that you don’t know who it is, whether they’re here in the states or they’re somewhere overseas.”
Johnston also says this bill should help create transparency for companies and customers, making the process of getting a loan both easier and more affordable for consumers.
“Hopefully this will put everybody on notice that it’s important that your customers know what they’re paying, what’s the terms of the loan,” says Johnston.
News 4 called ten different payday loan companies today to get their reaction to this legislation. However, none of them would comment for our story.
But Johnston says if you do need to take out a loan, try to work out a payment plan with the person you owe money, or ask family and friends for help before doing so.