Evening star., 1935-02-24
SMALL LOAN LAW
ACTION DUE SOON
Proposal for Higher Inter-
est Rate Debated Be-
fore Committee.

After hearing arguments on the
proposed new small-loan law for the
District yesterday afternoon, the Sen
ate District Committee will be called
by Chairman King to meet sometime
this week for final action. The COM
mittee voted about two weeks ago
to report the bill favorably, but Sena-
tor King later received requests for
further hearing
The pending bill, which would fix
an interest rate Of 2 per cent a
month on small loans, with definite
limit on the fee that could be charged
for obtaining a credit report on ap-
plicants, was favored by Corporation
Counsel E. Barrett Prettyman, Peo-
pies Counsel William A. Roberts
Evan H. Tucker of the Northeast
Citizens Association and A. j. Dris.
coll Of the Mid-city Citizens Asso.
citation.
Opposition to the bill was led BY
Paul E. Jameson. representing the
Burroughs Citizens Association and
the City Firefghters' Association, who
advocated strict enforcement of the
existing law of 1918, which limited the
Interest to ! per cent a month.
Jameson said there may be need for
an amendment to the old law to
curb what is known as procuring
Of loans for other persons. His op-
position to the new bill was directed
particularly at the proposed increase
in the rate.
Sees Enforcement.
Corporation Counsel Prettyman told
the committee he believes it is gen.
orally admitted that enforcement ot
the 1913 law would drive loan COM
panies out of the District. He saic
he believes the existing law can bt
enforced, and that he intends to en-.
force it. He pointed out. however
that Washington is surrounded BY
Maryland and Virginia laws. allow.
ing an interest rate of 3l2 per cent
a month. With that set of circum-
stances in view, he said, District
officials tried to work out a bill with
an interest rate on which it was
thought the loan business could bt
operated in the District. He saio
the pending bill was drafted, accord
ingly with per cent rate. The
corporation counsel expressed the
belief that, with proper regulations
small loans constitute a social service
and that if Congress reaches that
conclusion, he believes the pending
bill would be preferable to driving
loaning agencies out of the District
in view of the rates allowed in the
adjacent States.
Tucker said the citizens commit
tee which worked for the enactment
of the original law in 1913 favored q
2 per cent interest rate at that time
but Congress changed it to l per cent
He said there is social need fol
small loan facilities, and that tn
effort to obtain new bill has beer
going on for number of years.
Tells of Bills.
Roberts related the history of va.
rious small-loan bills that have beer
considered by Congressional commit.
tees IN recent years, some of which
proposed 3la per cent rate, and wert
not passed. Roberts and Prettymar
both opposed a rate that high il
Washington.
Roberts told the committee that il
1t decides not to report out the pending
small loans bill, that every effort
should then be made to secure enact
ment of a bill already on the Senate
calendar to make the usury law oi
the District more stringent.
Asked by Chairman King II hi
favored the pending bill, James G
Yaden, president of the Federation
Of Citizens Associations. said his owr
view is that if District residents coulc
borrow at per cent, it would be bet.
ter than having to go to Maryland
or Virginia, where the rate is higher
Alfred Bennett, representing a loar
company, said the company he spoke
for could operate in the District un.
der the bill being considered by the
committee.
H. Ralph Burton suggested thai
action be postponed until further
study can be given to the question
Senators Capper of Kansas, Nc.
Carran of Nevada and Austin of Ver.
mont took part in the hearing.