Senate clears loan bill

From May 14, 2003 Tulsa World (Oklahoma)

A so-called payday loan bill cleared the Oklahoma Senate on Tuesday as three national consumer groups said it sets a "debt trap" for borrowers.

The measure, Senate Bill 583, permits an annual interest rate of 421 percent for borrowing $300 for 13 days, the Consumer Federation of America said.

CFA, Consumers Union and U.S. Public Interest Research Group said the bill is a hidden "debt trap."

"The Oklahoma bill's 'protections' against getting mired in repeat loans are full of loopholes," said Rob Schneider of Consumers Union.

"All a desperate borrower has to do to renew a loan is to cash his paycheck, repay the first loan with cash, then write another check for a new loan."

Schneider said the bill "carves out special legal treatment for outrageously expensive and risky small loans marketed to cash-strapped consumers."