The Nevada legislature has passed new reforms that aim to protect consumer who use payday lenders for quick cash.
The proposal was sponsored by Assemblyman Edgar Flores (D-Las Vegas), who says he's seen people around the valley trapped in loans they can't pay off and some lenders getting out of hand with dramatically increasing rates.
AB163 makes some changes to the law to help consumers. One main change deals with "proof of ability to pay." Right now, someone applying for a loan usually signs an affidavit saying can they pay back the loan, but sometimes there's no way to verify whether they can pay it back.
Under the new rules, lenders would be able to check for more information like bank statements and income to make sure customers can pay the loans back.
Another big issue the new rules address deals with the "grace period" lenders use to give people more time to pay the loans back. 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 back 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 in the future, the legislature will also address people shopping around to different loan companies to pay back multiple loans.