Payday loan bill signed into law

Assembly Bill 478 closes loopholes in the payday loan regulation first passed by the 2005 Legislature. Assembly Speaker Barbara Buckley, D-Las Vegas, who pushed for the regulation, has said it was needed to stop greedy high-interest lenders from preying on the desperate.

“It’s nice to know good legislation can pass, even over the vociferous objections of special interests,” Buckley said at Friday’s signing ceremony in the Capitol.

“This is a big step to help our military men and women, who take out 20 percent of these high-interest loans nationally.”

After the bill passed the state Senate last week, Buckley said, lobbyists for some lending companies pressured Gibbons to veto it, prompting Buckley to call in military officials to bolster her case.

Several officials from Fallon Naval Air Station were present at the signing.

“I thank the military for backing this legislation,” Buckley said. “If not for their support, we wouldn’t be here today.”

She said the Department of Defense has called such loans the No. 1 threat to U.S. troop readiness. Because soldiers are typically young and financially unsophisticated but with steady jobs that they want to hang onto, they are targeted by lenders, she said.

Gibbons said the Secretary of the Navy, Donald Winter, called him Friday morning to urge him to support the legislation.

Because the 2005 legislation regulated interest rates of loans issued for less than a year, Buckley said, some lenders were writing loans for a year and a day, adding fees and other provisions that could lead to a $500 loan costing $3,000.

The law restricts the terms of loans, and bans “balloon” payments and extensions at the end of the loan term. It also forbids collection action against families of military personnel who are deployed in combat.