Payday-lending bill is pulled
February 14, 2006 - Richmond, Virginia
A bill tightening payday-lending laws was pulled by its sponsor yesterday, and the car-title lending industry failed to get the regulatory legislation it wanted from the House of Delegates.
The payday-lending measure, sponsored by Del. G. Glenn Oder, R-Newport News, was resurrected Friday after being tabled by a House committee a day earlier. Oder had originally sought a payday-lending database that would have allowed state regulators to better monitor compliance with state laws governing the practice.
Opponents of payday lending, including those who work with the poor, say such loans draw borrowers into a debt spiral from which it is hard to escape.
Oder got new life for his bill Friday by agreeing to forego the database idea and accept a series of amendments proposed by Del. R. Lee Ware Jr., R-Powhatan. The new proposal called for a series of additional standards to be imposed on payday lenders, such as requiring a day to pass before offering to allow a borrower who has paid off one payday loan to take out another loan and requiring lenders to offer borrowers payment plans to pay off their loans.
When it became apparent that an effort was going to be made on the House floor to amend Oder's bill to bring back the database, he requested that the bill be stricken from House consideration even before a vote was taken on the proposal. He explained later that he had promised committee members who agreed to rehear the bill that he would have the bill stricken if an attempt was made to bring the database back.
Although current payday-lending regulations will remain in effect without new legislation, he will be back next year with another bill that will make significant changes to the payday-lending industry, Oder said.
Another measure, which would have created state regulation for the growing car-title loan industry, was tabled until next year after Del. Harvey B. Morgan, R-Middlesex, rose to speak against it.
Morgan, whose own bill to put a 36 percent per annum interest cap on car-title loans failed to get out of committee, told the House about a Richmond-area borrower who had taken out a $1,900 car-title loan in August, has paid $700 on it and still faces a $4,000 balance.
The car-tile lending industry, which charges interest of 22 percent to 25 percent per month, is "predatory lending at its worst," Morgan said. Car-title lenders had asked the General Assembly to regulate them, he said, to give them a sense of respectability.
Richmond Times-Dispatch, Greg Edwards, Staff Writer
Related Stories - Virginia
- Who would span the payday lending gap? [December 17, 2006]
- Payday loan measure killed in committee [December 6, 2006]
- Avoid the loan sharks [December 4, 2006]
- Virginia delegates push payday loan reforms [October 7, 2006]
- The Payday Mayday: Faith communities join to curb predator practices [September 22, 2006]
- Virginia trying to set spending limits [August 13, 2006]
- Lawmaker takes interest in car-title, payday loans [August 4, 2006]
- Virginia payday loan reform is past due [May 24, 2006]
- Norfolk aims to curb number of payday lenders [May 16, 2006]
- Payday lending now has 1 billion dollar foothold in Virginia [May 4, 2006]
- Military loses to payday lenders [February 20, 2006]
- Payday-lending bill is pulled [February 14, 2006]
- Payday-loan repeal sought [January 26, 2006]
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