Stronger Colorado Consumer Protections Coming this January
DENVER, CO - On January 1, two new laws will go into effect to enhance language requirements for insurance information for non-English speakers and protect consumers from excessive fees on small loans.
“Every Coloradan deserves insurance coverage that best fits their needs, which is why we passed legislation to require professionally translated insurance documents for non-English speakers,” said Rep. Elizabeth Velasco, D-Glenwood Springs, sponsor of HB23-1004. “It’s disappointing that some insurers have threatened to suspend non-English language services, preventing communities from understanding insurance documents that can be difficult to comprehend even without a language barrier. Our law gives Coloradans the tools they need to choose an insurance plan that works best for themselves and their families, no matter what language they speak.”
“The laws going into effect today will help Coloradans by making insurance more accessible and loan fees less predatory,” said Senator Julie Gonzales, D-Denver, sponsor of HB23-1004 and HB23-1229. “HB1004 ensures that when insurance companies advertise in languages other than English, that they also translate the policy documents, because consumers should be able to understand what they’re signing and the terms of their policies. Additionally, HB1229 closes predatory payday loan loopholes and brings Colorado in accordance with the will of the voters. I’m looking forward to seeing the benefits these laws will have in my district and across the state.”
HB23-1004 requires insurers to have insurance policy information professionally translated or be certified by a professional translator in a non-English language. It also requires insurers of auto, home, and renters’ insurance to offer policy documents in the same language that is used for advertisements and to provide the policy application, policy and any related documents in any language upon request.
HB23-1229 protects consumers by limiting lender fees on alternative charge loans, which are short-term loans capped at $1,000. The law also increases the minimum term of an alternative charge loan from 90 days to 6 months, allowing more time for repayment. Separately, it ensures that out-of-state, state-chartered banks are subject to applicable Colorado lending laws when lending to Coloradans to protect borrowers and create uniformity within the state.
“Voters overwhelmingly approved Prop 111 to protect against predatory payday loans in Colorado, but until now, a loophole has allowed some lenders to continue related high-interest lending practices,” said Rep. Mike Weissman, D-Aurora, sponsor of HB23-1229. “With this law going into effect, we’re aligning Colorado law with the will of the voters and saving hardworking Coloradans money on these financial products.”
“Alternative charge loan fees can often top 100% for APR, penalizing low-income Coloradans for taking out small loans that help them afford basic necessities until the next paycheck comes in,” said Rep. Javier Mabrey, D-Denver, sponsor of HB23-1229. “Coloradans voted in 2018 to cap rates on these types of loans to 36%, but out-of-state banks have taken advantage of a loophole that allows them to circumvent our laws. Our new law will hold out-of-state banks to the rates voters approved of, protecting Coloradans from these predatory lending practices that exacerbate economic insecurity.”
In 2018, Colorado voters overwhelmingly passed Proposition 111 to crack down on predatory payday loans with high annual percentage rates (APRs). Since then, some Colorado lenders have replaced their payday loans with alternative charge loans, which are not subject to the same consumer protections. This bill would close that workaround to prevent lenders from overcharging Coloradans for credit that is often sought by borrowers already in duress.