Bill Summary for Bill Number HB05-1186

Final
BILL SUMMARY for HB05-1186

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes:

Action Taken:

Moved HB05-1186 be referred to the Committee of th

PASS

01:57 PM -- House Bill 05-1186

Representative Weissmann presented the bill to the committee. The bill changes the allowable delinquency charge on a consumer credit transaction to the lesser of 10 percent or $15. This provision only applies to loans of $150 or less.

01:59 PM -- Peter Minahan, representing the Colorado Financial Services Association, spoke in opposition to the bill. Mr. Minahan testified that there are administrative costs associated with late payments. He also testified that the delinquency charge serves as a disincentive for consumers to make late payments. Mr. Minahan responded to questions from the committee.

02:04 PM -- Mark Cumming, representing Colorado Credit Union League, spoke in opposition to the bill. Mr. Cumming testified that the bill would hurt consumers because it would serve as a disincentive for lenders to make small loans to consumers. Mr. Cumming responded to questions from the committee.

02:11 PM -- Don Childears, representing the Colorado Bankers Association, spoke in opposition to the bill. Mr. Childears' organization is not aware of a problem with the current law. He further testified that it would have a negative impact on banks. Mr. Childears referred to the Marquette decision, a U.S. Supreme Court decision, that allows banks to import rates of fees from other states. He testified that the Marquette decision applies to large major banks, and therefore this bill would apply to the smaller banks and credit unions in the state, approximately 20 percent of the banks in Colorado. Mr. Childears testified that these small institutions would not be motivated to provide small loans to its customers under this proposal.

02:17 PM -- David Emerick, representing the Consumer Financial Services Agency, spoke in opposition to the bill. Mr. Emerick testified that 30 states have higher fees for delinquency charges on these small loans. He does not feel that this is a major concern for consumers. Mr. Emerick answered questions from the committee.

02:24 PM

Representative Weissmann responded to more questions from the committee. He spoke to the issue of the bill creating a disincentive for lenders to make small loans to consumers. Representative Weissmann feels that the lenders would continue to make these loans based on consumer demand. Regarding testimony that the Attorney General's Office has not received complaints regarding this issue, Representative Weissmann has received complaints from constituents on the issue.


BILL:	HB05-1186
TIME:	02:28:17 PM
MOVED:	Marshall
MOTION:	Moved HB05-1186 be referred to the Committee of the Whole. The motion passed 7-6.
SECONDED:	Coleman
		VOTE
	Balmer	No
	Borodkin	Yes
	Butcher	Yes
	Carroll M.	Yes
	Coleman	Yes
	Knoedler	No
	Liston	No
	Massey	No
	McCluskey	No
	Paccione	Yes
	White	No
	Cerbo	Yes
	Marshall	Yes
Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS