NASHVILLE, Tenn. (WTVF) — A bill allowing interest rates to increase to 36% at certain money lending places is now headed to Tennessee Gov. Bill Lee's desk.
HB775/SB694 would allow for any amount of $100 or more to have an effective borrow rate at 36%, according to the bill. Rep. Dennis Powers, R-Jacksboro, and Sen. Majority Leader Jack Johnson, R-Franklin, are sponsoring the bill.
The bill passed in the Senate along party lines, but in the House a few Republicans voted against the measure. The vote in the House was 61-26-8.
Pay day lending companies' political action committees in Tennessee donate heavily to lawmakers.
"I think it’s terrible, we’re going to raise interest rates on the poor, the working poor. What constituent calls a representative and says, 'Hey I want to raise interest rates.' That’s ridiculous," Rep. Mike Sparks, R-Smyrna, said.
However, House Majority Leader William Lamberth, R-Portland, said it was just time to update state law.
"We adjust that from time to time, to allow those companies to still be able to survive, even though they were taking very high risk loans for folks," Lamberth said. "Those companies have to come to us, and prove to us there has to be an adjustment before we’re comfortable raising that limit. We’re to that point now, it’s been a couple of year."
Democrats were vehemently against the bill from the start.
"They continue to cut these corporate taxes, they continue to give these handouts of billions of dollars, but they continue to stack fees on working families," House Democratic Caucus Leader Rep. John Ray Clemmons, D-Nashville.
The bill is waiting for Gov. Lee. If Gov. Lee doesn't sign it himself, the bill will become law after 10 days.
Do you have more information about this story? You can email me at emily.west@newschannel5.com.
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