Missouri has the most permissive payday loan regulations in the nation, allowing lenders to charge a maximum fee for a two-week loan amounting to an annual rate of 1,955 percent. Sen. John Lamping, R-Ladue, is pushing a bill patterned after Florida legislation that would provide reforms while allowing lenders to remain profitable.
Otherwise, say bipartisan members of the Senate committee hearing Lamping's bill, if the industry does not reform itself, a much more stringent regulation is likely to be approved by voters, and Lamping says the industry "will go away."
The strongest argument for the status quo is preservation of the free market. Industry defenders say their loan offices are an important source of money for people who could not get loans elsewhere. Borrowers can determine how much they pay in fees and interest by not renewing.
However, Missouri's outlier status is making this argument hard to defend. Payday regulations can be tightened while still allowing the industry a profit many believe remains usurious. The details of Lamping's bill will be debated, and perhaps some tweaking is in order, but now is the time.
In the General Assembly, a successful bill has to be introduced by a Republican, but the issue would not be as far down the road without the hard work of Democrat Rep. Mary Still, who has been the legislature's payday reform pest.
We will not be driven by fear into an age of unreason, if we … remember that we are not descended from fearful men — not from men who feared to write, to speak, to associate and to defend causes that were, for the moment, unpopular.
— EDWARD R. MURROW, 1954