Bill targeting lenders' fees going to governor

House lawmakers reversed course and passed a bill Wednesday that would crack down on lending services that charge high fees.

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Legislation to rein in the high-cost lenders had twice faltered in the House, most recently Tuesday. About 24 hours after its last failure, Senate Bill 658 gained 20 votes to comfortably pass with 68-6, sending the measure to Gov. Asa Hutchinson's desk.

The motion to reconsider was brought by Rep. Sarah Capp, R-Ozark, who had previously voted against the bill but said she learned of Hutchinson's desire to see the bill passed.

A spokesman for the governor was unable to provide comment Wednesday evening.

The bill proposes to count fees as part of the interest for loans. It's aimed at CashMax, a lending service that has opened its doors in Hope and North Little Rock.

The Arkansas Constitution caps interest rates at 17 percent. CashMax charges up to 280 percent interest, as calculated by the company under the federal Truth in Lending Act guidelines, by charging fees that its owners say do not count as interest.

Opponents of the legislation argued that if there is a market for the loans CashMax offers, lawmakers should study the issue further before trying to shut the business down.

However, no one spoke against the bill Wednesday when it was brought up again.

The bill's sponsor, Sen. Jason Rapert, R-Bigelow, credited "persistence" with getting the bill passed. He said the governor also came out to clarify his support of the measure in recent days.

"As long as I can say anything about it, predatory lending practices will not be tolerated in this state," Rapert said.

Payday lenders were forced to leave the state in 2008 due to a state Supreme Court decision and the efforts of then-Attorney General Dustin McDaniel.

The office of current Attorney General Leslie Rutledge has acknowledged complaints about the CashMax businesses, but has not publicly addressed them.

A Section on 03/30/2017

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