Legislation in Minnesota designed to restrict the payday loan industry fell short Friday of winning final approval in the Minnesota Senate, meaning advocates of reform will have to wait until next year.
The Senate had voted 37-25 to send a bill to the House, which recently had adopted a different version of the legislation, but the session ended before Senate lawmakers could figure out a common proposal.
The Senate bill would have limited borrowers to 10 loans a year and required lenders to check whether the borrower already is overextended. It also required lenders to determine whether a borrower is a member of the military. If so, the annual percentage rate would have been capped at 36%.
Payday loans are short-term loans that many times are made without checking a borrower's credit or ability to pay. Opponents said the bill simply would push people in debt to unregulated sources of quick cash, such as Internet sources or old-school loan sharks.
Minnesota Gov. Mark Dayton urged lawmakers last week to pass a payday loan bill.
Earlier this month, Louisiana's Senate also failed to pass new restrictions on payday lending as industry lobbyists argued doing so would shutter many storefront lenders. A measure in the Louisiana Senate also would have limited borrowers to 10 payday loans per year and would have required payday lenders to enter transactions into a database for the Office of Financial Institutions to monitor.