Opponents target bill that would allow 29% interest rates on installment loans in Nebraska | Politics
But Senator Justin Wayne of Omaha argued the proposal would allow installment lenders to prey on people without good credit records. He pointed out that no consumer had come to ask for the change. The only witness in support of the bill was OneMain Financial, a company offering installment loans.
Other critics include Senator Carol Blood of Bellevue, who called installment loans “cash cows” for lenders and said bankruptcy filings reveal people getting into trouble taking out multiple loans.
Senator Tony Vargas of Omaha said the Legislature doesn’t need to change state law to make a business profitable. He also said federal regulators have raised concerns that states aren’t properly regulating installment loans.
He argued that lenders should be required to consider customers’ ability to repay loans, noting that many customers repay one loan by taking out another, and the default rate rises with interest rates.
Lindstrom introduced a similar bill two years ago, but fell victim to a filibuster organized by former Omaha Sen. Ernie Chambers.
Meanwhile, Nebraskans voted overwhelmingly to put a 36% annual cap on payday loans, also known as cash advances. It is a type of short-term, high-cost loan on which Nebraskanians paid a fee equal to an average annual interest of 405% in 2019. They are different from the installment loans at issue in LB 510 .