In a significant move to modernize small loan regulations, the Louisiana House Commerce Committee discussed a bill on May 6, 2025, that proposes to double the maximum amount for payday loans from $350 to $700. This adjustment, the first of its kind since the early 2000s, aims to address inflation and the evolving financial landscape for consumers seeking short-term loans.

Representative Lacombe, who presented the bill, emphasized that the increase is designed to reflect current economic conditions while maintaining existing fee structures and interest rates. The proposed legislation also includes a provision to tie future loan amounts to the consumer price index, ensuring that the limits will adjust automatically over time without requiring further legislative action.

During the meeting, committee members raised questions about the implications of the bill, particularly regarding consumer protections. An amendment was discussed that would prevent payday lenders from reporting negative information about borrowers to major credit bureaus, thereby helping consumers build their credit profiles rather than suffer penalties for missed payments. However, the final language of this amendment is still under review.

Importantly, the bill does not authorize an increase in the number of payday lending locations, focusing solely on the amount of money existing lenders can offer. This aspect was highlighted to reassure constituents that the changes would not lead to an influx of new payday lenders in their communities.

As the committee prepares to vote on the bill and its amendments, the proposed changes are expected to provide much-needed relief to consumers who rely on small loans, while also aiming to protect their financial well-being in the long term. The next steps will involve finalizing the amendment language and moving forward with the legislative process.