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Renewals may be banned on Payday Loans

JEFFERSON CITY, Mo. (AP) - The Missouri Senate has endorsed legislation that would prohibit borrowers from getting a renewal on payday loans.
State law currently allows borrowers to renew their loans six times. A payday loan can be no larger than $500 and can run only from 14 to 31 days.
The legislation was given first-round approval Wednesday by voice vote. It needs another affirmative vote to move to the state House.
Sponsoring Sen. Mike Cunningham, a Rogersville Republican, says his bill would prevent borrowers from getting into a trap by continuing to renew a loan and accumulate interest. His bill would give borrowers an extended time period to pay back a loan with no additional interest or fees.
 

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