Sarah Allen, executive director of Consumer Credit Counseling Services of Northern Colorado, said the story of people getting caught in the cycle of trying to repay payday loans is a common one. Payday loans are small, cash loans made to people who write out a postdated check for the amount they borrow plus interest, which is usually about $20 per $100 borrowed. In Colorado, payday lenders already were subject to several regulations, including caps on how much lenders can charge, the amount they can lend and how often a consumer can “rollover” a loan. The CCCS offers financial counseling for people in debt, and Allen said the office is sometimes able to work with payday lenders to set up payment plans to pay off the loans — but not in all cases. While Colorado limits payday loans at $500, other states allow loans up to $2,500, according to the Community Financial Services Association of America. read more

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