Proposition 111, New Limitations On Payday Lenders Explained

· Oct. 15, 2018, 10:00 am

Proposition 111 would reduce and cap the annual percentage rate (APR) a payday lender could charge, and expand what constitutes unfair or deceptive trade practices.

The measure would limit interest rates to 36 percent, and would also prevent lenders from adding origination and monthly maintenance fees. In 2016, the average APR on payday loans in Colorado was 129 percent.

Proponents for the measure argue residents are paying too much for small loans, and can end up borrowing money to pay off existing loans. Opponents say the measure could eliminate the payday lending business in the state entirely, which they say is an important option for those who don't qualify for more traditional types of credit.

The measure is statutory, meaning it needs a simple majority to pass.

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