Is Gov. Tim Kaine serious about protecting Virginians from predatory lenders?
More than once, Kaine has declared his support for an interest-rate cap that would prevent payday lenders from gouging customers with fees equal to a 391 percent annualized interest.
It's a great idea, he says.
But, apparently, it is not good enough to inspire him to introduce legislation on the issue this year.
Token backing from the chief executive won't be enough to get much-needed consumer protections through the legislature.
Any reform bill will have to get through two committees headed by Sen. Richard Saslaw and Del. Terry Kilgore, both of whom are hostile to restrictions on predatory lenders. The businesses have dropped generous checks into each man's campaign coffer.
As top-ranking leaders in the Democratic and Republican parties respectively, they have the clout - and the political self-interest - to put the kibosh on reform efforts.
It will take the weight of the governor's office to overcome that kind of opposition.
Kaine has a chance in 2008 to redeem himself after botching efforts to curb payday lending abuses last year. The governor publicly hinted he would add a 36 percent cap onto a separate bill that offered only modest tweaks to existing payday regulations. To thwart the governor, Sas-law, the sponsor of the bill, promptly shelved it so Kaine had no way to make changes.
That put reform efforts on hold for a year, during which time Kaine has waffled on the issue, alternately expressing support for an interest-rate cap and voicing doubts that it could pass the legislature.
During that time, thousands of desperate, low-income people have had been driven deeper into debt. The final tallies haven't been compiled for 2007, but the state's Bureau of Financial Institutions reports more than 433,500 people borrowed $1.3 billion from payday lenders in 2006. The average customer takes out more than eight loans a year. Payday lenders reported difficulties collecting on more than 150,000 loans in 2006. They ultimately sued 12,500 of their customers for unpaid debts.
The General Assembly convenes this week, and the battle will begin anew. Religious groups,
retirees and military organizations are mobilizing support for a rate cap.
They could use a leader. Where's the governor?
Delicious
Digg
Reddit
Facebook
Google
Yahoo
Stay out of it
Why doesn't the government just cap the payday loans where they are? Obviously customers don't have a problem paying the fee that they currently pay, otherwise the payday lenders would be out of business. Do I need my government telling me how to spend $30? Do you people even
know how a payday loan works? $30 is the fee for my last payday loan.
I am a hell of a lot better equipped to make $30 decisions than my
government. Will my Government please stay out of my $30 life, and worry
about bigger, more important things. For example, the billion dollar Iraq
war? The economy and inflation would be nice...I paid $75 at the gas
station the other day. What about the guys who spend $100 on lottery
tickets every week...is that a better value then a payday loan...that's
government sponsored! Hell, our government can't replace a toilet for less
than $10k, so why meddle in my $30 world? A little bitty payday loan is the best you guys can come up with? Here are some facts:
Fact. 100% of payday loan customer has a checking account and steady source of income. It is often said by idiot consumer advocates that payday lenders focus on the poor, unbanked, elderly, and handicapped
Payday lender industry owns Governor Kaine and the Democrats
Governor Kaine can't introduce legislation to curb the Payday loan industry. They own the governor lock stock and barrel. Money talks and the poor continue to suffer.