|
Welcome
groundswell on payday lending WHAT DOES Norfolk, population 240,000, have in common with the 2,000 folks who inhabit the tiny town of Shenandoah? What common ground exists between Arlington's liberal enclave and Harrisonburg' s conservative heartland? All of those communities have condemned payday lending as a scourge that preys on their neighbors. Has anyone in Richmond noticed the groundswell that's building? A dozen cities, counties and towns in Virginia have either passed resolutions asking state lawmakers to cap interest rates on small, short-term loans or adopted predatory lending reform as a goal they'll pursue during the 2008 General Assembly session. Some localities, including Norfolk, have used zoning powers to shoo some of the payday lenders invading their low-income neighborhoods. However, local leaders are fast realizing that the legal flyswatters in their arsenals are no match for the 805 payday loan offices that have overrun Virginia. Statewide fumigation, in the form of a 36 percent rate cap for all payday loans, is the most realistic solution. That rate cap was, in fact, state law until 2002, when state legislators voted to give payday lenders the right to charge fees equal to annualized interest rates exceeding 300 percent. The subsequent explosion of payday lenders in Virginia led to calls for reform, but state lawmakers have so far failed to act. That inertia is hard to explain based on a quick scan of the countryside. After all, this is an issue that unites rural, urban and suburban communities. Advocates for reform have sprung from every inch of the ideological spectrum. A peek into legislators' campaign coffers offers a clue. Payday lenders and their cousins in the car title loan business donated more than $400,000 to political parties and candidates in this year's legislative elections. While lawmakers have been busy counting their loot, though, more and more people have figured out that predatory lending is a big problem with a relatively simple solution. The town councils get it. The big cities get it. When will the legislators,
© 2007 HamptonRoads. com/PilotOnline. com
|
|
Presbytery of the James |