Lawmakers in Virgina Debate Military Payday Loan, Cash Advance Legislation
By Paul RizzoPayday Loan Writer
As reported by WVEC, Navy sailor Nathaniel Crumsey and his wife moved from Maine to Norfolk. He got his first payday loan just to help his family catch up financially.
“She use to work fulltime and we had to move because of the Navy, so we needed a little extra income because we were still living the same life we were with both jobs,” he said.
But Crumsey said the faxless payday loan ended up putting him even further behind.
“It’s been kinda like a snowball effect, getting one and paying off another, then going to another one to pay off the other ones,” he said.
His story and others like it are the reason that the Virginia General Assembly is considering changes, too.
Payday loans under fire: The House Commerce and Labor Committee last month reviewed two bills that will come before the General Assembly in 2007. One would repeal the 2002 legislation that authorized payday advance lending in Virginia. The other would create more regulations for payday lenders.
“The problem in Virginia is a consumer can go to one lender, borrow $500, go directly across the street, borrow another $500 and there’s no data base to check to see how many loans one consumer has at one given time and we need to address that issue in Virginia,” said Del. Kenny Alexander.
Cash advances do have their supporters – such as Lakita Pirtel, a single mother of three.
She said there have been times when her paycheck didn’t cover her expenses.
“My hours, they decreased and I had a hard time making ends meet,” she explained.
Pirtel said she’s gotten about a dozen cash advance loans in the past year, but she’s paid them all back.
“I’m not going to come into an institution and ask for $500 when I know I’m not going to pay it back. I have to know that the money is going to be there in the next two weeks to pay it back.”
She hopes payday loan businesses will stay in business in Virginia.
“Bad things have happened to people and some of them don’t have credit cards, so what do you do? It’s a good service, a good avenue, for the people who don’t have the luxury of having a credit card or people who are not able to go and get a loan at the bank.”
As would be expected, those in the business of instant payday loans believe the service should not be eliminated.
“Clearly, it’s a popular product here in the State of Virginia. The Commonwealth has shown its acceptance of the product and their interest in using the product. I think it’s important that we look at what the problems are and try and address those problems,” said JaBo Covert with Check Into Cash. “Maybe we just need to talk about some slight tweaking in the law and how the products offered.”
Nathanial Crumsey knows the lure of the faxless online payday loans.
“When you’re thinking of just the money, that if you need the money or you’re behind on something, you’re really not looking at the percentage. Even though it is high and you see it, well you just say ‘I can handle it. I’ll control it. It’ll be paid off no problem,’” he explained.
Crumsey went to the Navy Marine Corps Relief Society and got an interest-free loan to pay off his $1,500 debt.
“They got me out of trouble and I wouldn’t be, I wouldn’t have any money today. I wouldn’t have any food today if it wasn’t for them,” he said.
