Nevada Passes New Payday Loan Reforms

The Nevada legislature has passed new reforms to protect consumers who use payday lenders for quick cash.

The proposal was sponsored by Assembly Member Edgar Flores (D-Las Vegas), who says he has seen people around the valley trapped in loans they can’t repay and some lenders getting out of hand with rates which increase considerably.

AB163 makes some changes to the law to help consumers. One of the main changes concerns “proof of ability to pay”. Currently, a person applying for a loan usually signs an affidavit stating that they can repay the loan, but sometimes there is no way to verify if they can repay it.

Under the new rules, lenders could check more information, such as bank statements and income, to make sure customers can repay loans.

Another big issue addressed by the new rules is the “grace period” that lenders use to give people more time to repay loans. The new rules prevent lenders from using the grace period as an excuse to raise rates to a high amount or to offer another loan to pay off the original loan, which can create a cycle of debt.

Flores says he hopes the new rules will be a starting point to help people who use payday lenders. He says he hopes that in the future the legislature will also reach out to people who shop with different loan companies to pay off multiple loans.

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