By Tak Landrock
t.landrock@krdo.com

Follow me on Twitter @ www.twitter.com/taklandrock

COLORADO SPRINGS - A new bill is aimed to crack down on excessive interest rates and fees charged by payday loans and pawnbrokers, but those businesses say if it's passed they would close up shop.

Senate Bill 500, would cap the interest rates charged by these businesses at 36%. Right now, some charge as much as 700%.

"A lot of what we charge for is hauling the TV back and forth and writing up the necessary paperwork," says Ace Loans and Pawn Manager Charlie Bliss.

He's been working in the pawn industry for nearly two decades.

He says his shop charges consumers ten dollars for every $100 dollars you borrow for a pawned item. The fee must be paid within 30 days or you give up the pawned item.

Under the proposed law, that fee would drop to three dollars. It could put the pawnbroker out of business. "Since it costs a certain amount to even process a loan, keep up the building, heating the building, paying the insurance, paying the employees and we wouldn't be able to service it at that rate," says Bliss.

He isn't the only one concerned about the bill. One blogger calls Durbin's bill a "Rip off to Consumers." Lawrence Meyers writes the "Protecting Consumers from Unreasonable rates of Credit Act" only serves Sen. Durbin and "his big banking contributors."

The article found on bloggernews.net goes on to say banks are the biggest offenders of short-term loans. Under the proposed law, banks would be exempt from the law. Meyers uses bankrate.com to show how much banks make through bounced check fees and over limit fees for credit cards. For example, in 2008 banks collected nearly $37 billion dollars in overdraft fees, credit card overpayments equaled $19 billion, while payday lenders made $6.8 billion.

"Not only can bounded check/NSF be the most expensive products available on the market, they offer the least consumer protection and result in the most damage to a consumer's credit score, writes Meyers.