A new plan to allow short term lending in the state of Pennsylvania has been introduced in the legislature, but has a caveat or two has been added for payday loan opposition.

This bill would allow consumers who pay off their loans a path to longer-term, lower interest rate loans.  The new, short term loans are called micro loans.

According to an article on PennLive.com, the bill would cap loans at 25% of the applicant's gross income; interest rates on the loans would be capped at 28% and applicable fees would be capped at 5% of the loan amount.  There's more for consumers as well.  Consumers would be allowed to rescind the loan within 24 hours with no penalties or fees.

Consumers would not be allowed to obtain a new loan on the day that they pay off another.  And, if consumers pay back eight loans on time, they will earn "more affordable, longer term credit options."

Despite being banned in the state, it's estimated that more than 300,000 consumers obtain payday loans annually.