Consumer protection bill rejected by Okla. Senate committee

Journal Record, The (Oklahoma City), Feb 13, 2007 by Jeff Packham

A bill designed to discourage consumers from extending debt fell victim to a tie vote in the Senate Business and Labor Committee Monday.

Senate Bill 807 would have limited the annual percentage rate to 36 percent for military personnel who were taking out payday loans. State Sen. Andrew Rice, D-Oklahoma City, said the bill was filed due to military personnel being three times more likely to take out a payday loan.

Rice noted that there were 23 payday lenders in the three nearest ZIP codes to Tinker Air Force Base.

Other provisions included the extension of time to pay off the loans, a longer cooling-off period and a prohibition from having more than one loan owed at any one time.

"It's really trying to create some protections there for the consumer," Rice said.

Clem McSpadden, representing payday lending companies, suggested that Oklahoma's law was the strongest in the nation and that federal law was already addressing many of the same issues. He said as many as 400 companies could be put out of business by the bill.

Rice disagreed with the comparison to other states saying Oklahoma's protections were moderate compared with other laws. He went on to say that his bill was in no way an attempt to drive away any legitimate businesses in Oklahoma.

"If it were to put out the industry, I would be concerned with that," Rice said.

An amendment providing the Oklahoma Department of Consumer Credit the authority to enforce federal consumer credit laws was rejected after concerns about the extension beyond payday lending. The author, state Sen. Tom Adelson, D-Tulsa, said his intent was just to include the payday loans and the enforcement of recent federal laws.

Despite the committee consisting of four Republicans and four Democrats, the vote was not split down party lines. Freshman Sen. Sean Burrage, D-Claremore, voted against the amendment and the bill while chairman Harry Coates, R-Seminole, voted in favor of the amendment and the bill.