Virginia Payday Lenders To Charge Infinity Interest

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

House committee OKs bill on payday lending [Times Dispatch via CL&P Blog]

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  1. nweaver says:

    Loan sharks pay big campaign contributions.

    While those going to visit the sharks are far less likely to vote.

    So why not throw the chum to the sharks?

  2. with payday loans, most people don’t get hurt by the interest rate, they get mauled by the fees. transaction fees, delay fees, processing fees, ‘thank you sir may i have another’ fees… those are the things that make payday loans ridiculously vicious…

  3. timmus says:

    When asked for an explanation of the bill, a lawyer for the committee said, “The language was produced by the industry.”

    Holy cow, so the industry writes our laws? It’s one thing to make that conclusion… it’s another for the legislature to openly state it.

  4. Paul D says:

    @timmus

    You didn’t know that?

    Who do you think wrote the Telecom Act of 1996? Almost all the regulations regarding tobacco? Fuel emissions?

    Our legislators are lazy. If some lobbyist comes to you complaining of a problem with his industry and instantly produces a prepared solution (in triplicate), along with a fat contribution check…well you can figure out the rest.

    What really gets my goat is that lobbyists have set up a kind of teleprompter system within the House and Senate chambers. By law they can’t actually be in the room, but they can listen to the debate in real-time and provide instantaneous talking-points and rebuttals straight to their legislator of choice.

    Can you or I do that?

    Makes me sick.

  5. AcilletaM says:

    I must protest your characterization of willow trees…

  6. snowferret says:

    “The language was produced by the industry.”
    WTF?
    Is he saying that the members of the industry LITERALY wrote the legislation? Who fucking runs tht place?

  7. thrillhouse says:

    Lobbyists. Lobbyists run your state and federal legislators.

    Make no mistake, this bill was bought and payed for just like the so-called “bankruptcy abuse” legislation that went thru a couple of years ago.

    its really quite sad

  8. Panhandler says:

    Thoughtful discussion on similar issues can be found here: http://www.socialtext.net/utah-politicopia/index.cgi?payda

  9. Steven Francis says:

    Instant cash need as promised by the lenders of payday loans are allright but the mammoth total repayment they have to pay at repayment time almost kills the borrower. If the companies start writing laws like this, everything is over from the customers point of view.