Virginia Legislative Session to Discuss Payday Loans
By J.J. CameronPayday Loan Writer
An opinion piece in The Daily Press over the weekend talked about the upcoming legislative session in Virginia. It specifically focused on the ongoing attempts to regulate payday loans in the state …
On Tuesday, a special meeting of the House Commerce and Labor Committee, chaired by Del. Harvey B. Morgan of Middlesex, will hear testimony about [instant cash loans].
The three-part public session will give the floor for the first hour to the Virginia Partnership to Encourage Responsible Lending, a coalition of 22 groups committed to fair lending practices in the state.
Rather than trying to slap new regulations on the regular and faxless cash advance industry, the group is working for the repeal of the Payday Loan Act of 2002. If successful, this would place payday lenders under the Consumer Finance Act, which regulates other loans.
That would effectively establish an annual interest rate cap of 36 percent on small loans; currently the annual percentage rate on payday loans, which in Virginia can be no more than $500 each, averages 340 percent - almost 10 times higher than what the rate would be under repeal.
In the second part of the session, representatives of the bad credit payday loan industry will have their say. The final hour is reserved for a discussion and question-and-answer session by legislators.
With better organization and through increased education about the effects of the payday advance loan business, supporters of repeal hope they'll be able to bring the business into accordance with Virginia's other lending laws. It's a worthy objective, one that would help protect those who live paycheck to paycheck from entering a ruinous debt cycle
