Gov. John Hickenlooper has rejected an attempt by the state legislature to raise interest rates on small consumer loans. In his veto letter to lawmakers Thursday, the governor expressed skepticism about claims that higher rates are necessary to keep the industry viable.
"While we certainly see the benefits of offering the loan and credit products that are considered in this legislation, it has not been clearly demonstrated that access to such loans is under threat," the governor wrote.
The consumer loan industry and backers of House Bill 1390 have argued that interest rates have been capped for the past fifteen years, making it increasingly difficult for companies to make money offering these loans to consumers.
Hickenlooper also questioned the size of the interest rate increases authorized by the bill, pointing out the increases add up to significantly higher than inflation. For a $6,000 loan, the total interest rate would have increased nearly 40 percent.
The consumer loan bill passed in the final days of the legislature with strong bipartisan support. Progressive groups decried the policy however, and led the charge for a veto.
A number of other states have passed similar consumer loan interest rate hikes in recent year, according to the New York Times.
Friday is the deadline for Hickenlooper to veto any remaining bills from the 2015 legislative session.