Proposition 111, the Limits on Payday Loan Charges Initiative, looks to reduce the annual interest rate on payday loans to 36 percent and eliminate all other finance charges and fees associated with payday lending.
Currently, the maximum charges allowed for payday loans are as follows:
• Up to 20 percent for the first $300 loaned;
• A charge of 7.5 percent for any amount loaned above $300;
• Monthly maintenance fee of up to $30 per month;
• An additional annual interest rate of 45 percent.
Coloradans to Stop Predatory Payday Loans has led the campaign to support the measure.
“This is a massive drain on Colorado’s economy, sending millions of dollars to out of state corporations that otherwise would be spent in the local economy,” the group states on their website. “Fifteen states have ended the payday lending debt trap by capping rates at 36 percent or less, inclusive of fees.”
Coloradans to Stop Predatory Payday Loans is seeking to make Colorado the 16th.
According to The Center for Responsible Lending, the average payday loan in 2016 was for $392 and cost customers an average of $119 in interest and fees — around 129 percent. More than 414,000 payday loans were issued in Colorado in 2016, totaling nearly $50 million in fees and interest payments.
The State Ballot Issue Committee — also known as 13 Issues — registered to oppose Proposition 111. However, they never reported any campaign finance activity, according to ballotpedia.org.