{"id":29542,"date":"2021-03-03T11:19:17","date_gmt":"2021-03-03T17:19:17","guid":{"rendered":"http:\/\/update.legislature.ne.gov\/?p=29542"},"modified":"2021-03-05T13:35:33","modified_gmt":"2021-03-05T19:35:33","slug":"installment-loan-interest-rate-increase-advances","status":"publish","type":"post","link":"https:\/\/update.legislature.ne.gov\/?p=29542","title":{"rendered":"Installment loan interest rate increase advances"},"content":{"rendered":"

Lawmakers gave first-round approval March 2 to a bill that would increase the interest rate that licensees may charge under the Nebraska Installment Loan Act.<\/p>\n

\"Sen.
Sen. Brett Lindstrom<\/figcaption><\/figure>\n

Currently, a licensee may charge a borrower a maximum annual interest rate of 24 percent on the first $1,000 of an unpaid principal balance, and 21 percent on the remaining unpaid balance.<\/p>\n

LB510, introduced by Omaha Sen. Brett Lindstrom, would raise the cap to a single rate of 29 percent annually. The bill also would increase the annual license renewal fee paid by installment loan licensees from $250 to $500.<\/p>\n

Lindstrom said the interest rate cap has not increased since 1984 and consumers are choosing online lenders that are unregulated. Brick-and-mortar lenders need to survive, he said, because they are able to work with borrowers to understand their loans and help improve their credit in order to receive better interest rates in the future.<\/p>\n

\u201cThis [bill] does not mean that every loan would be charged 29 percent,\u201d Lindstrom said. \u201cIt broadens the range of borrowers the bank or lender can serve. I always like to make sure that individuals can access Nebraska businesses versus going online where they\u2019re not regulated.\u201d<\/p>\n

Sen. Matt Williams of Gothenburg supported the bill, which he said is necessary to serve both the installment loan industry and consumers. When voters chose to limit the interest rate cap on pay day lenders in 2020, they eliminated an important source of capital for borrowers, he said.<\/p>\n

\u201cWhat we thought was going to happen following the vote of the people on pay day lending is exactly what did happen,\u201d Williams said. \u201cWe have eliminated that industry in our state.\u201d<\/p>\n

Omaha Sen. Justin Wayne opposed the bill and offered a motion to recommit LB510 to the Banking, Commerce and Insurance Committee. He said raising the interest cap on installment loans so soon after voters chose to constrain the pay day lending industry in Nebraska would be \u201cpremature.\u201d<\/p>\n

\u201cNo consumer is actually asking for this \u2014 it\u2019s the lending industry that\u2019s asking for this,\u201d Wayne said. \u201cThis is a way for those who don\u2019t have the best credit to get preyed upon.\u201d<\/p>\n

Omaha Sen. John Cavanaugh referenced financial statements reported by a Nebraska installment loan company. He said they\u2019ve reported profits of $183 million in 2017, $447 million in 2018 and $855 million in 2019.<\/p>\n

\u201cThe rate at which their profits are increasing \u2014 I\u2019d say that\u2019s more than doubling \u2014 does not demonstrate an industry that is struggling and that needs further expansion in their ability to increase their rates,\u201d Cavanaugh said.<\/p>\n

Following Lindstrom\u2019s offer to work with opponents before the next round of debate, senators voted 11-28 on Wayne\u2019s motion. LB510 then advanced to select file on a 27-9 vote.<\/p>\n","protected":false},"excerpt":{"rendered":"

Lawmakers gave first-round approval March 2 to a bill that would increase the interest rate that licensees may charge under the Nebraska Installment Loan Act.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6],"tags":[140],"class_list":["post-29542","post","type-post","status-publish","format-standard","hentry","category-banking-commerce-and-insurance","tag-sen-brett-lindstrom"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/29542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=29542"}],"version-history":[{"count":4,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/29542\/revisions"}],"predecessor-version":[{"id":29617,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/29542\/revisions\/29617"}],"wp:attachment":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=29542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=29542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=29542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}