Earlier this month the Respectful Lending to Kansas Seniors Bill was introduces in the Kansas House. The bill is a starting point for change on payday loans, but only applies to seniors. For the bill’s purpose a senior is defined as anyone 60 and older.
HB2695 places a 36% interest cap on senior consumer loans and represents a great improvement over the rates typically paid for payday loans in Kansas.
The 36% rates is similar to the rate adopted for military personnel both nationally and in Kansas. It’s the same rate proposed by the Kansas Black Leadership Council, however, KBLC had hoped the rate would apply to all Kansans.
Jeanette Prior, a Topeka-based representative for the Kansas Catholic Conference, who helped draft the legislation, said the senior payday bill is just a starting point. With support from groups like the Silver-haired Legislature and AARP, the group hoes the bill will help “kick the door open” for future change.
The bill identifies a list of seven specific instances that constitute violation of the Seniors Act. It capes the number of loans a senior can have to two loans at $500. The maximum repayment a senior can make is $100/month. The law also outlaws title loans to seniors.
As a final incentive to lenders, the bill offers any lender that drops the rate for seniors to 15% and gives them one year instead of 7 months to repay receives a break on their income tax.
