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If localities can’t control them, Frederick says Assembly should By
Angela Jones Winchester — If the state government won’t let them corral unfair consumer loans, Frederick County officials want state officials to do it for them. At its regular meeting on Wednesday, the county Board of Supervisors approved a resolution asking the state Legislature to regulate businesses that lend cash to customers in exchange for collateral such as a vehicle title or a personal check for the amount borrowed plus interest. The county is one of a growing number of communities seeking stricter limits on such "payday" loans, but with no legal recourse to do it themselves, the communities’ officials are asking state leaders for legislation that will do this. Critics say these loans prey on low-income borrowers who find themselves trapped in a cycle of high-interest payments while trying to repay the loan. "It’s usury, plain and simple," said Supervisor Barbara Van Osten. "The individuals who take out these loans are vulnerable individuals who come to these lenders because they can’t go to a bank. They end up even further in continued debt." The lenders say their loans are meant for short-term need and that they inform borrowers about the terms and risks of such loans. In their resolution, the supervisors ask lawmakers to prohibit requirements such as a personal check or vehicle title as a condition for a "payday" loan and to cap interest rates on such loans at 36 percent.
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Presbytery of the James |