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DENVER—Colorado lawmakers are headed home after resolving a partisan standoff on the final day of the Legislative session.

The dispute on Wednesday threatened to force lawmakers to return to work over a routine regulatory bill that turned divisive when Republicans added an amendment helping payday lenders. Republicans gambled that Democrats would agree to avoid what Senate Republican Leader Mike Kopp called “an unnecessary game of chicken.”

But Democrats held firm, leaving the GOP with the choice of triggering a likely special session to hang on to their amendment. Republican leaders folded rather than require a pricey—and partisan—special session.

The session’s end underscored a rocky legislative term. Democrats ruled the Senate and Republicans controlled the House—the state’s first divided Legislature in a decade.

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