Congress passes legislation to limit payday loans made to military

Colorado Springs Business Journal, Oct 6, 2006 by Rob Larimer

"It's great for the soldiers right now," he said, "but not so great for the rest of us."

By the numbers

In Colorado, sub-prime lenders must register with the Attorney General's Office, which enforces the state's consumer lending laws. Banks and certain retailers and mortgage companies are exempt from the sub-prime category.

Here's a breakdown of other highlights from the attorney general's report about sub-prime lending activity:

Payday Lenders

The number of licensed payday lenders increased almost 14 perform from 2004 to 2005.

Nearly 250,000 Colorado consumers borrowed from payday lenders last year.

The average payday loan amount was slightly more than $300, to be repaid in 18 days with an average annual percentage rate of 345 percent.

Although 12.6 percent of payday loans were in default, collection activities resulted in the recovery of the majority of that amount, leaving 4.3 percent of payday loans charged off.

Almost 15 percent of the borrowers had 13 or more payday loans meaning they were in debt for at least six months of the year.

Small Installment Loans

In 2005, almost 10,000 Colorado consumers borrowed from small installment lenders.

The average small installment loan amount was slightly more than $300 to be repaid in six-and-a -half months. However, almost 65 percent of all small installment loans were renewed or refinanced in three months. Average annual percentage rates varied from 73 percent to 168 percent, depending on the loan amount and loan term.

Source: Colorado Attorney General's Office