Evening star., 1940-03-24
Allen Urges
Early Vote on
Small Loan Act
Reports Booking for
Bill Limiting Charges
To ~ % q Month

Adoption Of new small-loan act
for the District at this session of
Congress was urged yesterday by
Commissioner Allen as he announced
he had received assurances of sup
port from members of Congress, par
ticularly on the point that some
decisive action should be taken with
out further delay.
Chairman Randolph of the House
District Committee, Mr.. Allen said,
has agreed to support early action
by his group on the pending bill in
troduced by Representative Nichols,
Democrat, of Oklahoma, which
would fix the limit of charges, for
interest and all other fees, at 25 per
cent per month on the unpaid bal
ance of loan. Chairman King of
the Senate District Committee also
has taken interest in the issue, it
was said.
In past years, every effort to cor
rect the Districts present situation,
under which it is generally agreed
the present law is unenforceable, has
been set aside by uncompromising
positions taken by various groups, as
to how far the new law should go.
Present Rate Held Too Low.
The present law, which limits in
terest charges to per cent month
on the total amount OF the loan, is
held by some to permit too low a
yNrnf1t fay- 1or1nrS NorcY1oHa fhnY1H
to obtain license. Others point out
that the present law applies only to
interest charges and does not pro-
vide any regulation of charges made
for variety of other services" in
cluding that of the procurer of
loan, investigation, etc.
Former Corporation Counsel E.
Barrett Prettyman some years ago
proposed a new law permitting a
2 per cent charge per month on the
unpaid balance, this to include all
charges of all kinds, but this was
denounced by some as permitting
too high charge He then sug-
gested, as an alternative. an amend
ment to the present law which would
include the procurer's fee and all
other charges, in the per cent lin
it. He agreed the effect of putting
such teeth" into the law likely
would have the effect of driving all
the small-loan business out of the
District. No final action was taken
on either bill.
Seal Drafted Bill.
Last year, Corporation Counsel
Elwood H. Seal sent up another bill
and. at the suggestion of Mr.. Nichols,
a substitute was drafted by Mr..
Seals Office permitting a charge to-
taling 25 per cent per month on
the unpaid balance, this to include
all types of fees levied against the
borrower. The rule would apply
to loans of $500 or less. This bill
was drawn by Chester H. Gray,
assistant corporation counsel, after
conferring with officials of the Rus
sell Sage Foundation The bill has
been referred to the McGehee sub
committee of the House District
Committee, which last session held
a hearing on the bill. Action now
Is sought on this measure
Mr.. Gray explained yesterday the
pending bill would include in the
25 per cent charge per month all
such charges as those for the pro-
curer of loan, research, appraisal
of collateral security, preparation of
lien papers, notarizing of the docu-
ments, recording of papers and in
surance.
Loan Shark" Bill Introduced.
A bill to prevent loan sharks"
from ensnaring Federal or District
employees has been introduced by
Representative John Edward Sheri-
dan, Democrat, of Pennsylvania.
The measure would outlaw the
solicitatio nor collection of loans on
Federal or District property and
would make it illegal to attempt to
collect loans by appeals to Govern
ment officers.
Exempted from the provisions are
Federal Credit Unions and legiti-
mate national and State controlled
banks. Representative Sheridan
charged that loan sharks were
bounding Government employees.