FRANKFORT — Tammy Taylor was short of cash, so she resorted to a payday lender to get by. She thought it was a short-term fix but she says it ended up costing her $42,000 over seven years and led her to file for bankruptcy. She typically took out multiple loans at one time holding as many as five, which cost her about $500 a month in interest.

The single mother of two from Jessamine County makes about $30,000 a year, and she hopes with this year’s tax refund she can finally get clear. She’s taken financial literacy classes and now counsels others about the dangers of the industry.

On Monday, she joined several lawmakers and activists who want to put a cap on the interest such lenders charge.

House Bill 381, sponsored by Rep. Daryl Owens, D-Louisville, would cap such interest payments at 36 percent, matching the most the federal government allows for lenders to military personnel and joining 15 other states and the District of Columbia which have either capped interest or eliminated such loans altogether.

Owens said there are 782 such “check cashing services” in 95 of Kentucky’s 120 counties. Under his bill, lenders could not charge more than 36 percent; would have to display conspicuously any fees at the time the loan is undertaken; and violators would forfeit all interest on affected loans.

Tres Watson, spokesman for Community Financial Services Association of Kentucky, called the claims of proponents of a cap “baseless, irresponsible and just plain silly.”

He says the annual percentage rate often quoted by proponents of a cap – some as high as 400 percent – don’t apply to short-term loans and notes that Kentucky law presently prohibits “rolling over” such loans for longer terms.

But consumers such as Taylor and proponents of the cap say consumers frequently have multiple loans, pay off one loan by taking out another and end up paying “predatory” interest rates over time. Under present Kentucky law, lenders are supposed to allow no more than two such loans to one customer at any time.

Last year, Rep. Johnny Bell, D-Glasgow, sponsored successful legislation which requires such lenders to report all loans and transactions in real time which then are to be tracked by the state and organized into a data base which can show if lenders are making multiple loans to the same customers and how much money customers end up paying in interest. He’d previously sought to pass his own interest ceiling, only to have industry representative’s dispute statistics cited by such groups as the Kentucky Coalition for Responsible Lending and Citizens of Louisville United Together (CLOUT) which support a cap.

“It may be something that’s very much needed,” Bell said Monday of the proposed cap. “But the problem is we don’t have the data.”

Owens and others say no data is required to know that such lenders are preying on poor and working families.

“This is nothing but pure, simple justice for the poor,” said Rep. Jim Wayne, D-Louisville. “You don’t stomp on the poor when they’re down and the payday lenders are doing just that.”

He and Owens said House leadership should ensure the bill gets a full hearing by the Banking and Insurance Committee. But Rep. Jeff Greer, D-Brandenburg, who chairs the Banking and Insurance Committee wouldn’t commit to hearing the bill.

He said he will have hearings to determine why the state has not yet implemented Bell’s legislation from a year ago – the bill has a deadline for establishing the data base by July 1 of this year but it has not yet been implemented. As for Owens’ bill, Greer said he would talk to House leadership about it.

Speaker Greg Stumbo, D-Prestonsburg, said, “I’m for the bill – I’d vote for the bill.” But he won’t pressure Greer into conducting a hearing on it.

“We let our chairmen have that discretion,” Stumbo said. “So it’s up to him what he wants to do with it.”

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.