Monthly Archives: March 2015

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    Attorney General, Nelson renew call for strong payday lending regulations

Attorney General, Nelson renew call for strong payday lending regulations

March 31st, 2015|

From the Office of the Washington State Attorney General

March 31, 2015

AG renews call to reject payday lending bill

Applauds President Obama’s push for federal reforms

SEATTLE — Attorney General Bob Ferguson today applauded President Obama’s recent push on a proposal to reform federal payday lending rules, while encouraging state legislators to reject a bill that purports to do the same thing.

Last week, Obama announced the Consumer Financial Protection Bureau’s proposals to crack down on payday lending that results in “debt traps.” The proposals would require lenders to do more to verify a borrower’s ability to pay or implement restrictions to foster affordability, as well as regulate collection practices.

“I’m glad to see a strong push at the federal level to reform a system that, in many instances, unfairly preys upon those in need,” Ferguson said. “Here in Washington, I encourage our legislators to kill the proposal before them now that, however well intentioned, will hurt the people it purports to help.”

Washington’s existing payday lending system already contains important safeguards for consumers, including the option for installment payments, which would be lost if the proposal — House Bill 1922 and Senate Bill 5899 — is adopted.

“In a time when our state and the nation are experiencing record income inequality, I cannot understand why we would seek out ways to aggravate the struggles of those trying to make ends meet,” Sen. Sharon Nelson said. “This industry is called predatory for a reason. They take someone’s moment of crisis and turn it into an opportunity to trap them in cycles of debt for their own profit. The system we have in Washington now is working — it is a model for other states, and it is exactly the kind of common sense consumer protections the president called for last week. In this case I say, ‘If it ain’t broke, don’t fix it.’”

In a Feb. 26 public letter to lawmakers, Ferguson expressed his opposition to the pending legislation and pointed out some of its shortcomings for consumers.

Simply put, the bill would make taking out these loans more expensive for most consumers. Only borrowers who proactively pay the entire debt before the second installment is due would save any money on the maximum $700 loan.

A borrower in Washington already has the option to convert his or her payday loan into an installment loan. Lenders are required to inform borrowers of this option, and the Department of Financial Institutions reports almost 15 percent of borrowers convert their payday loans into installments.

When a traditional “balloon payment” is due, a borrower can request an installment plan, and the lender must allow a plan of up to 180 days.

Importantly, the lender cannot add any additional fees or charges to the debt.

As an example, under the current system, a borrower taking out a $700 payday loan would pay a maximum origination fee of $95. If they request an installment plan, giving them up to six months to pay, their repayment would remain $795.

The proposed system before the Legislature would add other costs and fees. On the same $700 loan for six months, the borrower would pay 36 percent interest, a 15 percent origination fee and a 7.5 percent monthly maintenance fee.

If the borrower took the entire six months to pay, he or she could be on the hook for more than $1,195 — $400 more than they would pay today.

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The Office of the Attorney General is the chief legal office for the State of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.

CONTACT:

Communications Director Peter Lavallee, (360) 586-0725, PeterL@atg.wa.gov

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    Nelson on House bills: Minimum wage, paid sick leave and the Voting Rights Act are policies Washingtonians demand

Nelson on House bills: Minimum wage, paid sick leave and the Voting Rights Act are policies Washingtonians demand

March 5th, 2015|

Senate Democratic Leader Sharon Nelson released the statement below following the State House’s passage of the Voting Rights Act on Thursday:

“Our colleagues in the House continue to pursue ideas that will have a positive and lasting impact on people and communities throughout our state.

“On Tuesday the House voted to raise our state’s minimum wage as well as ensure that moms and dads will no longer have to choose between sick children or a paycheck. These fantastic policies will have lasting impacts on hundreds of thousands of Washingtonians.

“The message from the House was clear – ‘we stand on the side of working families.’

“Now, by passing the Washington Voting Rights Act, the House has sent another clear message – ‘we stand on the side of fairness and on the right side of history.’

“I hope the Senate will follow this example. I was disappointed that when presented with an opportunity to pass the Senate’s version of the VRA on Wednesday, Republicans stood in the way.

“The minimum wage, paid sick leave and now the Voting Rights Act are policies people throughout our state demand.

“I’m calling on the Republican-controlled Senate to take up these critical matters so that this body, too, can have a hand in making things better for millions of Washingtonians.”

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    Sen. Nelson applauds the State House’s adoption of minimum wage hike

Sen. Nelson applauds the State House’s adoption of minimum wage hike

March 3rd, 2015|

Senate Democratic Leader Sharon Nelson released the statement below Tuesday following the State House’s passage of a measure to raise Washington’s minimum wage:

“I applaud the leadership of our colleagues in the House of Representatives for passing a bill today that will benefit hundreds of thousands of working Washingtonians.

“The economy is improving, but not for everyone. This important piece of legislation represents a critical component of the remedy for income inequality.

“This is in stark contrast to the Republican-controlled Senate. While the House works to make life better for more of our friends and neighbors, Republicans continue to work against them. Republican-sponsored bills that create sub-minimum wages, roll back protections for sick or injured working people and legislation to make it difficult for working folks to have a say in wages and working conditions are all being considered in the Senate.

“These common sense ideas coming over from the House will make life better for working families and benefit our entire economy – including those at the very top. These ideas must have their day in the Senate to create an economy that benefits everyone, not just a few.

“There’s no starker contrast between Democrats and Republicans than on these issues. At the same time Democrats took action to make things better for working families, Republicans continue to promote policies that make the gap between the rich and the rest of us even wider.”