A predatory-lending bill, allowing lenders to make more money on high-interest loans, passed a state senate committee yesterday, with supporters of the bill telling reporters that increased profits are necessary to keep personal-loan lenders in Colorado.
That’s the major argument for the bill. Specifically, backers told the Durango Herald that the one company offering such loans will leave Colorado if it’s not allowed to make millions more here.
The Denver Post’s Joey Bunch was the only reporter to ask Springleaf Holdings, Colorado’s only lender of personal loans (after a merger last year with its competitor), how the company was doing. I mean, that’s the key question.
Is it struggling to make ends meet, like many of the folks it lends money to are? People who pay the company 36 percent interest on a $1,000 loan as it is?
Phil Hitz, who represented Springleaf Holdings, acknowledged that the company is very profitable nationally and confirmed the 30 percent Colorado growth over the past four years.
Bunch apparently didn’t ask Hitz if Springleaf would leave Colorado if the bill didn’t pass, but all indications are that it would not.
Last year, when a similar predatory-lending bill was debated, the Colorado Attorney General’s office testified that access to such loans is not threatened under the current interest-rate structure. Similar testimony was reportedly offered yesterday as well.
So the bill’s backers haven’t refuted the key point that lenders of personal loans are profitable and thriving. Instead, the market in Colorado is actually growing. There’s no indication that the lenders will walk away from Colorado and its money.
To be fair, Hitz told Bunch that Colorado is the company’s lowest yielding state, and other states help subsidize it.
But lowest yielding state compared to what, astronomically-earning ones? We know the company is “very profitable” nationally. So the fact that it’s doing well enough in Colorado is a signal that states should protect consumers, many of them low-income, and adopt Colorado’s humane regulatory framework.
That’s another conversation reporters might have with Hitz.