DENVER – Consumer groups are calling on Gov. John Hickenlooper to veto legislation they say would raise finance-charge limits on small loans.
Left-leaning groups fear that the bipartisan House Bill 1390 would dramatically spike interest rates on smaller personal loans.
The bill passed quickly, causing some to worry that it did not receive adequate debate. It was introduced as one of the last bills of the legislative session – which ended May 6 – and sat on the calendar for only a week before it cleared both chambers.
The legislation would set finance-charge limits as high as 36 percent on loans and consumer credit sales.
“In a legislative session that was supposed to be about the middle class, this bill moves Colorado in the wrong direction,” the Bell Policy Center wrote to the governor, asking for a veto. “The Legislature can address this issue again next session in a manner that ensures all viewpoints are heard and more measured deliberations take place.”
Other groups calling for a veto include the Colorado Center for Law and Policy and the Colorado Progressive Coalition.
But bill supporters – including the finance industry – say it would only address limits on the amount that can be loaned. The lowest-tiered small loan would jump from $1,000 to $3,000, with the highest moving from $3,000 to $5,000. The proposed interest rates would be tied to those loans.
“Some people have said this is an interest-rate increase, when it is actually not,” said Sen. Chris Holbert, R-Parker, a sponsor of the bill. “It is adjusting how much the lender can lend.”
Meanwhile, Hickenlooper’s office is examining the veto requests.
“We just received it last week, and our policy and legal teams are still analyzing the language and the policy behind the bill,” said Hickenlooper spokeswoman Kathy Green. “We’ve heard from a number of organizations with concerns, so we need time to review.”