RI lawmakers to weigh new payday loan rules

PROVIDENCE, R.I. (AP) -- Payday loan businesses would have to cap the interest they charge at 36 percent under a proposal heading for legislative review in Rhode Island.

A Senate committee is expected to hold a hearing on the legislation Tuesday.

The authors of the bill say payday loans now come with annual interest rates of up to 260 percent and can trap low-income individuals in a cycle of debt.

Payday lenders, however, say the bill would force them to close and eliminate a useful financial product.

A similar bill is pending in the House. No votes on the legislation have been scheduled.

Similar bills have failed in recent years.