Colorado voters overwhelmingly approved a ballot measure to cap interest rates on payday loans at 36%.
The passage of Proposition 111, which also prohibits payday lenders from adding origination and monthly maintenance fees, makes Colorado the fifth state to impose caps on payday loans through a voter referendum.
In 2010,
Before passing that measure, the state had estimated that average annual percentage rates on payday loans ranged from 340% to 400%. Within two years, the number of payday loans made in the state fell dramatically and more than half the state’s payday lending stores closed.
Yet consumer advocates have said that average APRs on payday loans made in the state could still legally exceed 200% after accounting for fees and that APRs averaged 129% in 2016.
Proposition 111
“Those who are on the ground understand the harm that triple-digit loans cause struggling families, and they made sure those stories were heard,” Ellen Harnick, director of the Center for Responsible Lending's western office, said in a press release.
South Dakota voters