Friday, August 4, 2006

Delegate Glenn Oder is aware of how those in his state are having difficulty with payday loans and other high interest loans. That's why he sat down with a car title loan officer to find out how many ways he could get fleeced; or, to be more exact, how he could find out more about such resources.

The Republican from Newport News plans to champion bills curtailing car title and instant payday loan lending in his state. He's concerned that increasing numbers of desperate Virginians face financial ruin at the hands of loan companies offering quick cash at crushing interest rates.

"If I was going to get a loan," he told the loan officer, "I'd like to know more about the process."

True to form, the representative lowballed him on the car's value, then offered him an annual interest rate in the triple digits.

"My immediate impression of that was, there's a lot of value left on the table," Oder says. "It was pretty clear where this was headed."

About that time, Oder resurrected his bill to restrict short term payday loans. A similar payday loan bill died a painful death in the House this year, but Oder believes he has the support now to get it passed in 2007. The bill would limit an individual to a total of three outstanding payday loans. It would also build a statewide database to track cash loan activity.

It's not perfect, but it's a start.

Oder sounds like a guy who empathizes with folks who need a last-ditch, short-term payday advance for medicine or rent or food, and just can't get it elsewhere. He also recognizes the risks.

"There's no doubt this is swimming in very, very deep water. With an undercurrent," Oder says. "I can see where it fills a need in the marketplace. Philosophically, while I wish this wasn't here, it is here it clearly needs to be regulated."

While Oder tackles the problem from the demand side, legislators must also tackle it from the supply side. Tamara Dietrich, the author of an article in The Daily Press, urges lawmakers to cap those damnable interest rates. Let the payday loan sharks know that low-income Virginians aren't for sale anymore, no matter how lucrative the campaign contribution.

Del. Harvey Morgan, R-Middlesex, sponsored a bill last session to cap rates at 36 percent. It couldn't make it past a House subcommittee.

It was Morgan who authored the bill several years ago that ushered faxless payday loan and car-title lenders into the state in the first place. By last December, as evidence mounted of the havoc such loans were wreaking, Morgan declared, "I'm not sure we did the right thing."

Morgan can do the right thing now and push his bill hard come January.

Later this month, Oder plans to confer on his payday cash advance bill with the Virginia Interfaith Center for Public Policy, a nonprofit advocacy group active on this issue. In October, Morgan plans hearings in Richmond for testimony on payday and title lending.

The mission is clear and the proselytizing has begun.

This entry was posted on Friday, August 4th, 2006 at 6:08 am and is filed under Virginia.