Payday Lending Compromise Debate

By: Shane Symolon Email
By: Shane Symolon Email

While many are supporting a compromise on payday lending reform in the Virginia House of Delegates, some payday lenders say the deal is no good.

Those payday lenders say that putting a cap on lending rates, changing the length of the loan, and limiting how many loans people can take out could put them out of business.

Staunton City Councilman Bruce Elder says his dream of payday reform is close. He led Staunton to be the first in a wave of 60 localities to ask for a cap on payday lenders.

He says the new compromise bill that will be placed before the General Assembly is still a step in the right direction.

"I think it’s a genuine effort at a compromise. It's not what the industry wants. It's not what the advocates of a 36 percent cap want," says Elder.

Lenders say the rate structure would be confusing and say customers should be able to borrow as often as they want.

"It places an arbitrary cap on the number of loans consumers can have in any given year. I mean, there's no other financial service that has a cap on it. You don't have a cap on how much you can use your credit card," says Jamie Fulmer, Advance America.

He also says if the bill were to pass, it would hurt consumers more than help them.

"It changes the very nature of the payday product by making it, instead of it being due on your next payday, you would have two pay cycles before you would pay this back and that’s not how consumers use our product," says Fulmer.

Elder also says laws protecting military personnel should be extended to protect non-military citizens from what he calls predatory lending.

"That protection extends to military personnel but not our own people. This is all that we ask for. That’s all 60 localities are asking for," says Elder.


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