An aggressive campaign by the payday loan industry has paid off in Virginia. The House of Delegates approved a bill removing all caps from interest rates charged on payday loans.
In counterbalance, the bill limits the amount of payday loans made to a single person to 3, whereas before there was no limit. Of the 446,000 Virginians that took out payday loans in 2005, 91,000 borrowers took out 12 different payday loans each, according to the State Corporation Commission.
When asked for an explanation of the bill, a lawyer for the committee said, “The language was produced by the industry.”
From 3.3 million payday loans in 2005, the industry gleaned $1.1 billion in revenues.
Hopefully the governor rejects the bill, and doesn’t bend over for the loan sharks like a willow in the wind. — BEN POPKEN