On the final day of the session, Alaska lawmakers passed sweeping payday loan reform to shield borrowers from predatory lending. The House approved Bill 35 with a 24-16 vote, and the legislation was sent to Governor Mike Dunleavy’s desk for final action.
If signed, the bill will cap interest and fees for loans under $25,000 at an annual percentage rate of 36%. The legislation removes payday lenders from a long-standing exemption that permitted exorbitant interest rates beyond typical loan protections.
Anchorage Democratic Sen Forrest Dunbar and Representative Ted Eischeid co-sponsored the bill to end what they called a harmful legal loophole. Eischeid compared payday loans to salt water for the thirsty, claiming they offer temporary relief but worsen long-term financial stress.
He pointed out that military personnel already benefit from a federal 36% APR cap, but veterans remain exposed to these predatory rates. An estimated 15,000 Alakans use payday loans each year, many of which have APRs as high as 521%.
Supporters say the bill ensures that struggling Alaskans won’t be lured into endless cycles of debt and aggressive repayment schemes. Opponents, including Representative Jamie Allard of Eagle River, argue that the measure interferes with personal freedom and financial choice.
The bill arrives amid renewed scrutiny of tribal lenders like Minto Money, which operate online with steep interest and limited oversight. Though Minto doesn’t lend in Alaska, lawmakers worry the profits of high-interest lending ventures may entice other villages.
Dunbar emphasized that payday lenders serving Alaskans are based out of a state and primarily conduct business. If Governor Dunleavy approves the payday loan reform, it will be a decisive step in protecting Alaska families from exploitation.
