Loan interest rates could increase if Colorado bill passes

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DENVER -- If you have needed some cash to pay some bills and your credit isn't great, chances are you tried out a supervised lender.

One of the more prominent in the Denver area is One Main Financial, according to the Bell Policy Center.

"I was in a bad predicament and they really bailed me out," said Whisper Smith, a One Main customer.

Currently, Colorado law limits a 36 percent interest rate to the first $1,000 of a supervised loan. But a new bill, SB 185, would increase the loan amount that a 36 percent interest rate could be applied to.

According to data by the Bell Policy Center, a 36 percent interest rate could be applied to a $1,385 loan if this law passes.

"These are loans primarily to people with dinged up credit so it's going to increase that by about 10 percent," said Rich Jones, director of the Bell Policy Center.

Jones helped organize a protest of "swarming sharks" at the Capitol where  people wore shark hats and played "Jaws" music to signify loan sharks.

But supporters of the bill, including State Sen. Ray Scott, who is the primary sponsor, said this is about giving struggling Coloradans the opportunity to get a loan. Higher rates increases the likelihood someone will get approved.

"It helps open up more of those credit channels. It allows providers to charge appropriate interest rates," Scott said.

The measure passed the Republican-controlled Senate Finance Committee on a party-line vote. It will now be voted on by the entire Senate.