Pa. Budget-Related Bill Hung Up Over Payday Loans

By Marc Levy
|  Wednesday, Jul 3, 2013  |  Updated 8:11 PM EDT
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Pa. Budget-Related Bill Hung Up Over Payday Loans

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A budget-related bill is hung up in the Pennsylvania Legislature after the Senate on Wednesday stripped out a provision inserted by the House that suggested that House and Senate Republican leaders support the legalization of high-interest "payday'' loans in Pennsylvania.

As a result, the bill, which otherwise guides how hundreds of millions of dollars in public money is to be spent, headed back to the House. There Republican leaders will determine how time-sensitive the bill is before recalling rank-and-file members to Harrisburg to vote on it, a spokesman said.

Senate Majority Leader Dominic Pileggi, R-Delaware, told reporters that said the statement on payday lending was not true and had not been agreed to by Senate Republicans.

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"I think words are important ... and that language was inaccurate and should not be in'' the bill, Pileggi said.

The fiscal year began Monday, and the House and Senate both recessed until Sept. 23.

The 57-page bill emerged publicly Monday evening, just before the Republican-controlled House approved it over Democratic opposition.

The House GOP spokesman, Steve Miskin, said he could not explain why the payday lending provision was in the bill or who inserted it. The Philadelphia Inquirer reported that a lobbyist for one payday lending company organized a golf-outing fundraiser in February for House Speaker Sam Smith, R-Jefferson, in Pebble Beach, Calif.

Many consumer groups oppose payday lending, and Pennsylvania has some of the nation's strongest laws against payday lending, despite repeated efforts by financial services companies to loosen state laws and do business here.

The bill directs $45 million to Philadelphia schools as part of a rescue package for the district, and its passage holds up $235 million in aid to higher education institutions, Gov. Tom Corbett's office said.

Corbett, who has promised voters on-time budgets, signed the general appropriations bill in a $28.4 billion budget package on Sunday night. But the general appropriations bill just is one piece in a legislative package that authorizes the state's spending.

In a statement Wednesday, Corbett asked legislative leaders "to resolve their differences and act responsibly'' to send the bill to his desk for approval as soon as possible. His budget secretary, Charles Zogby, said failure to promptly pass the bill "could have significant implications on commonwealth spending and revenues.''

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