Pa. State Sen. Pat Browne, R-Lehigh County, has re-introduced a proposed law that would allow "payday lenders" who charge fat fees and triple-digit interest rates for two-week loans and loan renewals that can boost interest charges.
A similar bill pushed by longtime payday lender advocate Rep. Chris Ross, R-Chester County, stalled in the state Senate last year. If this bill passes it will await the signature of Gov. Tom Corbett, who as Attorney General prosecuted illegal payday lending.
According to Mark Price, economist at the Keystone Research Center in Harrisburg, current law limits payday loan charges to $3.80 for a two-week loan, or 24% annually, though the state also allows fees that have the effect of boosting loan costs.
Under Browne's proposal, according to Price, interest charge limits would increase to more than 400% a year, or a $16.07 charge to borrow $100 for two weeks.
The Harrisburg Patriot-News reviews Browne's bill, SB 975, here.