The state Senate gave final passage to a bill that eliminates payday loan rollovers and creates the option for extended payment plans. The bill passed 20-13, with a handful of Republicans and all but one Democrat voting no.
The bill's sponsor Mike Cunningham, R-Rogersville, said the bill is the first meaningful reform and regulation of the payday loan industry since he has been in the Legislature.
"Some people thought the bill went too far, some people thought the bill didn't go far enough, so I guess it was a good compromise," he said. "It's the first time we have any actual meaningful reform."
But Democrats and some of Cunningham's Republican colleagues did not agree, arguing the reforms does little to address concerns that the loans trap borrowers in endless cycles of debt. Eight Democrats and five Republicans voted no.
"I'm just not sure that it's not more of a shroud for the industry than it is a solution to the concerns ... It looks to me like we are passing something even though it may not do anything," said Sen. Ed Emery, R-Lamar, who opposed the bill.
Emery said he would like to see reforms that require more transparency from the industry about the specifics on the loans, which are often complicated financial agreements being signed by people with little financial knowledge.
Sen. Kurt Schaefer, R-Columbia, also opposed the bill, but said he still thinks it is possible he could support a reform package that returned from the House.
"I had some concerns about the level of reform," Schaefer said. "We'll see what the House does with it, I think ultimately we could end up with something that is a positive reform package."
Sen. Joe Keaveny, D-St. Louis, was the only Democrat to support the measure. The payday loan bill will now head to the House.