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The Virginian-Pilot
It will be difficult for lawmakers to disentangle Virginia from the web that predatory lenders have spun on our communities.
But that arduous task must be accomplished during this winter’s General Assembly session. If legislators flinch, as they did in 2007, they will give payday lenders another year to become more entrenched in the halls of the Capitol and in neighborhoods across the state.
The number of payday offices in Virginia ballooned from 596 to 791 in the past three years. Twenty-two new payday offices sprouted up in South Hampton Roads just last year.
Dig deeper into the statistics collected by the State Bureau of Financial Institutions, and the human cost begins to emerge.
Payday companies loaned out $1.3 billion last year, up from $655 million in 2003, the year after they received permission to charge more than 36 percent interest. More than 433,500 people obtained a short-term, high-interest loan in 2006, with nearly 97,000, or nearly one in four, taking out 13 or more loans.
Payday lenders filed lawsuits against 12,500 borrowers last year, more than double the number reported in 2003.
Hampton Roads has long had one of the highest concentrations of payday lenders in the state, but Northern Virginia communities have reason to fear that they will soon be swamped with new offices peddling “easy money.”
In September, the City Council of Washington, D.C., voted to cap payday loans at a 24 percent annual interest rate. Many of those companies are expected to flee across the state line into Virginia, where state laws allow interest rates of nearly 400 percent.
North Carolina banned predatory lending last year, while Maryland and West Virginia have never granted state approval for payday companies.
Surrounded by states that have made it clear payday lenders are not welcome, Virginia leaders must take swift action to protect their constituents or they will bear the blame when payday lenders overrun the state.
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No they are not idiots
and yes they are victims of a scoiety that has gone mad. The people who use Payday Loans are middle class yes, middle class, and low income bracket folks trying to make it from one day to the next. For those of you who think otherwise, then I might suggest you are the idiot for not know how life revolves around these people. Try a little understanding, it really does go a long ways!
Idiots...
Anyone who would take out a short-term loan at 400% apr has serious judgment issues. Anyone who would continue to do this is an idiot. Payday lenders don't exist because corrupt politicians allow them to - payday lenders exist because morons continue to use them. People who use payday lenders should never be classified as 'victims'. They made a choice, after all. All together now, say it with me: "Personal Responsibility." (I know, too much to ask, as usual.)
It isn't just payday loans
but take a look a the credit card banks who increase rates at a whim. Those increases are aimed at the middle class and the lowere income people. Banks are not hurting for money. Bush wants to cap interest rates to help prevent foreclosure, but the majority of the foerclosure sates are Republican bases. Sorry, but I have no sympathy for those individuals, they knew what they were getting into.
Not going to happen
Get rid of payday lenders? Those who have the power to make that happen are so deep in the pockets of the payday lenders their hands are stuck. We had a chance to get rid of some of them this past election on Nov. 6. Most of them get re-elected. We now not only will have the payday loan sharks, Senator Norment who is on Dominion Virginia Powers payroll will be back in Richmond passing laws to make DVP able to raise rates without justification. All of our legislators seem to be wedded to the special intrests and are benefiting from the enormous amounts of cash their lobby is spreading around to them. There is something very wrong with this picture.
More nanny state totalitarianism
We demand that our master tighten our bonds lest we harm ourselves in our freedom. "The ultimate result of shielding men from the effects of folly is to fill the world with fools."-- Herbert Spencer. "But what does freedom mean? It means that hundreds of millions of ordinary human beings live their lives as they see fit -- regardless of what their betters think. That is fine, unless you see yourself as one of their betters."--Thomas Sowell. "The urge to save humanity is almost always only a false-face for the urge to rule it."-- H.L. Mencken