It's been three years in the making and Thursday, state legislators passed increased regulations for the payday lending industry. Identical bills passed in the state Senate and House of Delegates, but not everyone sees this as good news.
Jamie Fulmer, the director of public affairs for lender Advance America, says lenders will take a big hit in profits because of the bill.
"From a business perspective, we know that right off the top these new regulations represent at least a 20-percent reduction in our revenue because of the new fee structure," says Fulmer.
Delegate Glen Oder of Newport News supports the bill and says it's meant to help keep lenders honest.
"If a payday lender is in business to help somebody with an immediate cash crunch to get through a difficult period, then clearly this law a allows them to do this. If the goal is to continue to lend to the same person the same amount of money over and over again, this bill will break that cycle," says Oder.
The bill says borrowers can only have one loan at a time. They will have 14 days to pay it back, instead of seven, if they are paid weekly, and the annual interest rate won't exceed 36 percent.
"One of the key components of the new law is that you can get five loans in 180 days, but the fifth loan in 180 days is a loan where the lender or the payday company has to let you pay it off through an extended payment plan," says Oder.
Fulmer says if a borrower still needs a loan after 180 days, and can't get one, their alternatives may not be good.
She says, "If they decide that in a 180-day period that they need a sixth payday loan to help them bridge the gap between paychecks and that option is not available to them any longer, then they may be force to turn to more expensive options such as bouncing a check or paying their overdraft protection fees or paying their bills late."
The bill now heads to Governor Tim Kaine's office