Alaska Governor Vetoes Rate Cap Bill

Alaska Governor Mike Dunleavy has vetoed a bill that would have capped interest rates for consumer loans up to $25,000 at 36 percent, which opponents of the legislation say would have drastically limited credit access in the state. Senate Bill 39 passed both the Alaska House and Senate this session before heading to the Governor’s desk on June 23.

“These changes would reduce short-term credit options – particularly for those without access to traditional banking services—while creating enforcement challenges for the state,” Dunleavy wrote, according to the Alaska Beacon. Other opponents of the bill said it would limit consumers’ choices and loan options, especially for borrowers with poor credit. 

Alaska Public Media also highlighted that several states have similar rate cap limits, and the federal government also restricts payday lending for active-duty military members. Other lending institutions also provide emergency loans. 

Alaska’s Division of Banking and Securities found that 7,085 Alaskans took out payday loans in 2023 totaling $17.4 million. The loans averaged $440, and each borrower took out an average of 5.5 loans. 

Rep. Ted Eischeid (D-Anchorage) introduced the bill in the House.

“I’m very disappointed in the veto,” Eischeid said in an interview with the Alaska Beacon. “This was a bipartisan bill.”

Advocates for the legislation are now hoping that the Legislature can override Gov. Dunleavy’s veto in January.

“I would like to see this effort be successful,” Eischeid said.