Payday lenders were offered a sweet deal this week, and all they could do was whine that it wasn't sweet enough.
It's time for legislators to stop trying to satisfy the predatory lenders and pass reforms that provide real protections for consumers.
House and Senate committees endorsed a bill that allows predatory lenders to charge customers the unconscionably high fee of $105 for a $500 loan, up from the $75 they now collect. And this is in a "reform" bill.
The plan also permits a payday lender to string a typical customer along with 10 loans in a single year.
Virginians could take out as many as 15 loans a year, according to an analysis by The Commonwealth Institute.
That means low-wage earners in the construction, retail and restaurant industries would be most vulnerable to entrapment in a vicious cycle of debt.
Even so, payday lenders predicted many of their stores would pack up and move out of state unless lawmakers gave them freer rei n to bilk their customers.
Payday lenders insist they are providing a valuable service to people with poor credit when an emergency arises.
Yet now these lenders say they cannot survive unless their customers have more than 10 emergencies every year, and unless they can assess exorbitant fees at the onset of each new difficulty.
That's not a healthy business plan, and it's a clear admission that payday lenders are taking advantage of people in distress.
Members of the Legislative Black Caucus are committed to winning greater consumer protections before the legislation is passed by the General Assembly this week.
If they fail, Gov. Tim Kaine should use his executive authority to amend the legislation so that predatory lenders must abide by the 36 percent interest rate cap imposed on other financial institutions doing business in Virginia.
Payday lenders are certain to squeal, but the price for their support is too high and will fall most heavily on those who can least afford to pay.
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Keep Government out our business
I'm not certain how the state government got involved in the first place. I did read an article last year, about some state and local representatives that borrowed a large amount of money. Some one thought it unfair to charge a large amount of interests so they had second thoughts about paying it back. In terms of interests it's no difference that paying penalty and interests on owed taxes. Is that considered a rip off? You know the amount owed when you file late. Same for when you borrow some one Else's money. It's posted up front and nothing is hidden. People usually go to those institution when they are in a crunch. They know the risk, and its fair to payback what you borrow. Let people grow up and learn for themselves.
not the problem
We can drive payday lenders out of Virginia without legislation - don't use them. Payday lenders aren't the problem, it's the people who use them. Payday loans, bounced checks, credit card cash advances, credit card over limit, etc, etc. The only person responsible for their cycle of debt is the individual.
Been there, done that. Make up your mind to be responsible, then do it. It's not easy, but it's worth it.
jmo
Personally
I hope the payday lenders win. When I retire from the Navy next year I'm going to fund the rest of my life as a predatory lender. I'm going to set up shop as close to the gates of every military installation in irginia and North Carolina. I will keep the government in debt to me through it's soldiers and sailors.
Let the buyer(or borrower in this case) beware and keep government control out of our lives as much as possible. Sometimes I think Darwin got it mostly right, only the intelligent will survive instead of the strong. If I make a deal with someone to give them 200 bucks and they agree to give me 300 bucks back or I take their stuff, so be it, it's none of the governments business as long as I ay my taxes on the 300.