RICHMOND
Virginia lawmakers are close to a compromise agreement on a payday lending overhaul bill, a key negotiator said Monday night.
State Sen. Kenneth Stolle, R-Virginia Beach, said he hopes negotiators will have hammered out an agreement by the time the Senate version of the payday lending bill, SB588, goes before the House of Delegates' Committee on Commerce and Labor this afternoon.
The compromise, according to Stolle, will likely include:
- A 36 percent cap on interest rates.
- An opportunity for payday loan recipients to use an extended payment plan.
- A cap on the number of loans.
- A database to limit loans borrowers take out.
"Hopefully, they'll adopt a bill that's in conformity with what I've said," Stolle said.
Stolle's explanation of the negotiations came after Senate Majority Leader Richard Saslaw, D-Fairfax, threatened to kill the payday lending bills unless negotiators can work out a compromise.
Saslaw told the Senate Committee on Commerce and Labor that he was leaning toward not appointing conferees from the House and Senate to work out the details on the bills. "It would really behoove you all to try and get this thing settled over the next seven to eight days," Saslaw said.
Saslaw, who sponsored his own payday lending legislation last year and then pulled it, said the discussion over payday lending has gone on for 14 months.
"Every other day, they got an agreement," Saslaw said of negotiators. "Then every other day, they don't got an agreement."
Stolle said Saslaw "probably feels that the parties have had enough bites at the apple."
Del. Kenneth Melvin, D-Portsmouth, said Monday night that negotiators are "working feverishly."
Everyone agrees on the 36 percent interest rate cap on payday loans, Melvin said. But the payday lending industry does not want a cap on the number of loans people can take out, he said.
He also said negotiators have gotten stuck on the length of payment plans for the loans.
Stolle said the negotiations seem to be based more on emotion than reality.
"Many people who want to reform payday lending actually want to abolish payday lending," he said.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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Payday Lenders are not the problem
It is very likely that a 36% interest rate will lead to the collapse of the industry in Virginia. The reality is that payday lenders should probably be the least of lawmakers concerns given the state of the economy and the prevalence of phenomenon such as increased bankrupties, foreclosures, companies downsizing, inflation etc. It is unfortunate that there is less of a concern by those who oppose the short-term loan industry as to why there is such a large market for alternative financial products. In addition, there are more reasons to be in support of the payday loan industry than against. Not to mention that the CFSA, the national trade association, has made great attempts to address lawmakers concerns and provide mitigation.
Leave it alone
You just don't get it. States have already changed the percentage rate on the payday loans and the lenders left the state. I know some of you think that is a good thing, but statistics show that the stores help. Read this: http://anovstrup.blogspot.com/2008/02/payday-lending.html
I am called uneducated and a victim because I use payday loans, but it seems that you morons are the uneducated and you are all victims of the "lawmakers" and Senators because they are feeding you false information. If payday stores shut down, bounced check fees go up, overdraft fees go up, and big banks get even more rich than before, and guess who benefits from that...that's right, the government. Leave the stores alone, they provide jobs and a service that I and many others take advantage of. If you don't like the fee they charge, don't use them!
Beware of the bickering
Our reps are not haggling to protect consumers, they are scheming to make themselves look as good as possible come election time. Payday lenders are an easy target because a small percentage of the population uses their products, and opponents can make all kinds of outrageous claims. What happens when I get an overdraft charge from my bank? Any bounced check under $100 will exceed this cap, but I doubt anyone can get re-elected going after the banks.