A local state representative defended a much maligned bill amendment this week dealing with credit service organization regulations.

According to state Rep. Doyle Heffley, R-Carbon, the bill does not allow payday lenders to run wild when it comes to interest rates, as critics of the legislation have suggested.

“This is an update to the Credit Services Act, which hasn’t been updated since 1992, and it doesn’t remove the interest rate caps as some have stated,” Heffley said.

“In fact, it puts in additional measures to protect borrowers. When you go on the internet or watch television, you see advertisements for these types of advance loans all the time, and we don’t want people taken advantage of through that. We want regulations in place.”

A 2010 state Supreme Court decision affirmed a law that currently caps interest rates on short-term loans at 24 percent.

A recent PennLive editorial labeled the bill “exploitative” and suggested that, if approved, the bill would “open a loophole in state law big enough to drive an Abrams tank through, trapping (veterans) in a crushing cycle of debt.”

“Lenders would be allowed to pose as so-called ‘loan-brokers’ and to seek licensure under Pennsylvania’s law intended to regulate credit-repair organizations,” the editorial continued.

Heffley said he doesn’t see it that way and views the amendment as a way to bring Pennsylvania’s law up to date with today’s technology.

“House Bill 2429 protects consumers by requiring the fees, interest and payment schedule of loans be completely and accurately disclosed upfront — at the time when money is borrowed,” he said.

“This legislation also requires credit service organizations to assess a buyer’s ability to repay the credit extension, further protecting consumers. When you go to get any bank loan, they’re going to assess your ability to repay it. That is what we’re looking for here as well.”

According to watchdog website cityandstatepa.com, the bill was scheduled for a vote before the House Commerce Committee this week, but was canceled.

Heffley said proposal will get to a committee hearing after lawmakers work to address any and all concerns involving its stakeholders.

“There’s a lot going on in Harrisburg right now,” Heffley said. “We’re not looking to rush this through. (The House) just passed a budget that was on time with no tax increase and we’re working on multiple other bills all directed at helping taxpayers and consumers. The House also just passed my bill this week addressing inadequate reimbursement rates for independent pharmacies.”

Before getting involved with state government, Heffley supervised trucking company employees. He gave the example of one employee who had his car break down at the start of winter and needed a front on pay.

With the advance, the employee was able to come back to work and pay the company back.

“If someone doesn’t have an employer willing to do that or they fall on hard times and need that advance, they should be able to do that. We just want it regulated and protections in place for the borrower.”

Around 100 organizations are fighting Heffley’s lending legislation, according to the PennLive editorial, which called the bill “the latest iteration of a yearslong push by payday lenders to expand into Pennsylvania.”

Heffley, however, rejected the thought that the bill amendment is a “payday lending bill.”

“We’ve been accused of trying to trap people in poverty with this bill and that is not what it’s about,” he said.

“I am working with interested parties to address concerns about the fees structure and it is my hope we can come to an agreement on amendments to improve this bill so that consumers are even further protected.”