The Community Financial Services Association of America is voicing its disapproval of a new proposal by Kentucky Governor Steve Beshear to impose rate caps on what payday lenders in the state can charge their customers.
Speaking in support of the 743 payday lenders that operate within the state, CFSAA spokesman Tres Watson said that a decision to limit the fees could put many of the businesses in financial trouble as they are unable to make a profit.
"A cap on payday transactions will drive lenders out of business," Watson told the Courier-Journal.com. "We hope the governor will look past the falsehoods peddled by our opponents and reconsider his decision."
Under the regulations being proposed by Beshear, payday lenders within the state would have to cap the interest rates they charge customers for their loans at 36 percent. While current regulations allow payday lenders to charge interest rates that have been alleged to be up to 400 percent, many have argued that attempting to measure short-term loans with tools meant to gauge annual figures leads to misleading numbers.
Additionally, lenders cannot charge more than $15 for every $100 loaned out and cannot hand out payday loans exceeding $500, meaning that initial fees cannot top $75 for a loan that is taken out. 
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