Thursday, February 26, 2009

Pecking at the payday birds

SB 1470 has passed the General Assembly and will soon be on the governor's desk. It prohibits payday lenders from offering open-end lines of credit. The predatory lenders began offering these lines of credit after the legislature placed modest limits on their lending practices. The open-ended loans have no cap on interest and their use is generally seen as a way to dodge the law passed last year.
But, there is something fowl about this bill - it does not include any regulation of increasingly pervasive car title lenders. Virginia should have real limits and real regulatory teeth of both payday and car title lenders. Governor Tim Kaine hasn't said what he'll do with the bill. Sign it and accept a half-baked bird.... err, bill that may take the wind out of the wings of future action. Or veto it and tell the legislature to get it right next year.
Given that this is Kaine's last year, that the predators will probably lavish House candidates with grist this November, and we don't know who will be the commonwealth's Big Bird this time next year, CCC urges Governor Kaine to sign SB 1470. A glass half full is better than one totally empty.

1 comment:

Truth in Lending said...

The Governor should amend this Bill to put a 36% interest rate cap on open-end lending. Let the legislators vote on this cap and be held accountable to the voters.