Evening star., 1955-07-14
Small Loans Bill
For D. {. Voted
BY House Unit
Maryland. Virginia
Lawmakers to Fight
Measure on Floor

The banking subcommittee to-
day approved and sent to the
full House District Committee q
bill to revive small loan and
pawn-brokers' businesses in the
District of Columbia.
In executive session after the
morning hearing, the subcom-
mittee made certain changes in
the bill, reyiving from an earlier
bill permission for small loan
companies to take out life in
surance on borrowers: decreasing
the amount Of capital needed
from 100000 to $4,000 to set
up such a business, and to dou-
BILE the license fee required from
$3.50 to $500.
Two Republicans representing
nearby areas which now do much
small loan and pawn business
with District residents, Broyhill
of Virginia and Hyde of Mary
land. said they would oppose the
bill as it stands.
Plans Floor Fight
Mr.. Broyhill said after the
subcommittee approved the draft
that he would oppose it in the
full committee and on the House
floor.
Mr.. Hyde said he would oppose
the bill unless the rate of in
terest charged would be set by
either q special commission OF
by the District Commissioners.
The subcommittee earlier heard
testimony that the Congress
might have to spend a lot of
time haggling about interest
rates If they are set by law.
Paul H. Williams, executive
vice president and general coun-
sci of the State Loan Finance
Corp. although opposing the bill
lin its entirety as unnecessary
warned of the wasted time that
could result from congressional
setting Of the interest rates.
Sees Firms Wrecked
Mr.. Williams said he repre-.
sented not only his own company
but 10 Of the 103 licensees doing
small loan business in nearby
Maryland and Virginia.
"This is going to wreck busi-
ness out there" Mr.. williams
declared. The small loan COM
panies just over the District line
from the city. he said, do half
their business with District resi-
dents and half with people in
their own localities.
Established lenders. Mr.. Will
liams said, also have leases and
business fixtures in their present
locations and would be unable
to move into the city and do
business under this law.
He also said that the 500, 900
capital required before the sub
committee amended the bill
would lead to monopoly by fore
ing out small operators.
Assails Revenue Idea
Mr.. Williams. assailing the
idea that this bill would raise
the tax revenues of the city, said
that If all the nearby lenders
moved 100 per cent of their
business into the District it
would raise revenues only $50,004
on the 1854 tax rate.
Arthur j. Cade. representing
Consumer Credit Insurance Corp.
urged the inclusion of the life
insurance provision. Myron r.
Bone, executive vice president of
the American Industrial Bank
ers' Association. urged that the
present bill be scrapped and a
discount system" of lending be
established here.
The bill would provide inter-
est rates for small lenders of 3
per cent per month on the first
$3.50 borrowed; 2 per cent per
month on the next $3.50, and /
per cent per month on the
next $500.
Pawnbrokers, under the bill.
could charge 2 per cent per
month on the first 5000: / per
cent per month on the next $500,
and 8 per cent per year on any,
thing over $1,000.
Those businesses were chased
into the suburbs by a 1918 law
which allowed only per cent per
month interest to the lenders.