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Associated Press - February 24, 2010 2:34 PM ET
ST. PAUL, Minn. (AP) - Minnesota lawmakers are trying to close a loophole in state law they say is allowing lenders to overcharge people who want an advance on their paycheck.
Rep. Jim Davnie (DAV'-nee) of Minneapolis says three payday lending companies have skirted state lending laws and overcharged borrowers nearly $6 million since 2003. He and others will introduce a bill targeting the practice on Thursday.
The companies named by an advocacy group are Payday America, the Unloan Corporation and ACE Cash Express.
The chief executive of Payday America says the proposal would make it harder for needy people to get the money they need.
Backers of the legislation say the companies misused an obscure statute to charge some borrowers double the interest allowed under Minnesota law.
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