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Posted by on Jan 29, 2015 in Predatory Lending

Virginia legislature kills payday loan proposals

Virginia legislature kills payday loan proposals

A committee in the Virginia state legislature has killed proposals to regular the payday and auto-title industry in the Commonwealth.

Here’s a snippet:

RICHMOND — Car title and payday loan vendors will face no new hurdles this year, after a House committee killed seven bills — including two from a Petersburg lawmaker — that would have further regulated or even banned such businesses.

The House Committee on Commerce and Labor voted down the bills on Tuesday.

Payday and car title loans are perennially under fire from both sides of the aisle for what critics call predatory lending practices and outrageously high interest rates.

Del. Joseph Preston, D-Petersburg, pitched two of the seven bills that failed. HB 1973 would have let any locality “reasonably limit the number of motor vehicle title loan businesses, payday lenders, check cashers, and precious metals dealers that may be operated at any one time within its territorial limits.” HB 1976 would have given that authority just to the city of Petersburg.

Del. Joe Morrissey, a Richmond independent,  was the chief patron of two of the seven bills before the committee.

H.B. 1990 aimed to put a blanket ban on payday lending and HB 1899 sought a 36 percent interest rate cap per year on payday loans. According to the report, the committee rejected bills to close loopholes to existing laws regulating payday lending near military bases and facilities.

Another report gives a glimpse of the stranglehold that the payday industry has on Virginia’s elected leaders:

It took less than five minutes for a House of Delegates committee to kill a bill to shut down a kind of high interest rate loan that keeps piling on debt even when borrowers make their basic monthly payments.

The sponsor, Del. David Yancey, R-Newport News, figured that was progress.

“The first time I tried, I couldn’t even get a motion. Last year, I got a motion, but no second. This year, at least they voted,” he said after the House Commerce and Labor Committee killed his measure to crack down on triple-digit interest rate lines of credit.

The power of predatory lenders is really astonishing. Maybe next year the Delegates will allow for a few minutes of discussion before they kill the bill.

 

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