Virginia Governor Heads Payday Advance Loan Attack
By Paul RizzoPayday Loan Writer
Gov. Timothy M. Kaine (pictured) is now personally involved in efforts to clamp down on the regular and online payday advance industry.
With time running out for a deal, Kaine met privately yesterday with Reginald N. Jones, lead lobbyist for the lenders, amid indications they may want assurances Kaine will not seek tougher reforms if a bill reaches his desk.
Kaine, however, favors an interest-rate cap - opposed by lenders as a veiled effort to put them out of business because it would make it unprofitable to offer unsecured payday cash loans up to the legal limit of $500.
Kaine also might support restrictions on the number of loans Virginians annually can take out from money stores. Currently, there are no limits, though industry critics suggest borrowers carry no more than nine.
“The governor believes there should be some reasonable new protections for consumers,” spokesman Kevin Hall said. “He has felt, for some time, that the . . . removal of the interest cap was a very bad policy decision.”
After his session with Kaine, Jones declined to comment.
But before the meeting, Jones said it would not be wise to limit Virginia payday loans because it could drive borrowers to unregulated lenders, such as those operating on the Internet.
He said the industry might consider more lenient terms for borrowers to begin extended-payment plans for erasing overdue loans that, for some, carry triple-digit interest and take months or years to repay.
Facing stiff resistance in the House of Delegates, which favors a 72 percent interest cap, quick cash advance lenders for the first time began direct negotiations with their foes last week.
Del. Jennifer L. McClellan, D-Richmond, told The Associated Press reform efforts might fail if a compromise is not reached today, when a House committee could vote on the remaining lending bill.
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