Public Service Commissioner Foster Campbell, the state’s second-longest-serving public official and an early supporter of Gov. John Bel Edwards, wrote to the governor Friday asking him to veto payday loan legislation that It has been on your desk for the past week.
“The last thing Louisiana needs to combat its state ranking as second highest in poverty is payday loan shops luring more low-income people into high-risk, high-fee loans they can’t afford,” he wrote. Campbell to his Democratic colleague. “As published testimony against the bill shows, there are easy-to-use options for borrowers that don’t come with predatory terms like a 36 percent interest rate and a monthly ‘maintenance fee’ of 13 percent of the original amount. of the loan”.
The state’s current payday loan system allows lenders to offer a loan of up to $350, due on the borrower’s next payday. The most a payday lender can do per loan is $55.
Foster Campbell asked Governor John Bel Edwards to veto a payday loan bill
Senate Bill 381 does not replace or reform that system. Instead, create a new product.
Lenders offering the new product outlined in SB381 would get most of their money from a monthly “maintenance fee” worth up to 13% of the original loan amount.
For a $1,500 loan, that fee would be $195 per month.
Edwards’ staff did not immediately respond to a request for comment on Campbell’s veto request.
Campbell, of Bossier Parish, was first elected as a state senator in 1976. In 2003, he joined the Public Utility Commission and is still on the utility regulatory board, representing a district with voters who are not members of the Congress. Campbell ran unsuccessfully statewide as a Democrat for Governor in 2007 and for the US Senate in 2016. He was also an early supporter of Edwards.
Is a $1,500 loan worth it if it costs you another $1,500 in interest and fees?
Sponsored by Sen. Rick Ward III, R-Port Allen, SB381 left the Senate on April 19 with a vote of 20-14, enough to pass. State Sen. Gary Smith, whose wife, Katherine Smith, is a registered lobbyist for one of the companies supporting the legislation, was the only Democrat on that initial vote to support the measure.
Smith, he and his wife did not discuss the bill. Payday lenders are the “only place some people have to go to get a loan. They can’t go to a bank. They can’t go to a credit union,” he said.
A bipartisan environment was on both sides of the final 54-35 vote in the House on May 10.
Four Democratic senators voted with a majority of 23-13 in the final vote on the measure that sent the legislation to the governor. Six Republicans voted no in the final vote on May 16.
Louisiana Democratic Party Chairwoman Katie Bernhardt said the party has not met to take a formal position on the legislation. But Democrats generally oppose payday loans.
House Democratic Caucus Chairman Sam Jenkins, D-Shreveport, said Friday that Democratic lawmakers haven’t met yet, either. “It will be something we meet about,” he added.