The subject was working it's way through early committee votes back then.
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http://video.google.com/videop...

George did a pretty good job of attacking all the big issues. The representative from the industry also did a decent job of defending and presenting his side.... we had a bunch of compliments on the thoroughness with which they covered the subject in the one hour show.... Including from some of our legislators whom wanted more background as well....

Lowell I find even in the issues where we disagree a level of alignment. We may at times disgaree about solutions but rarely that a solution is required. The exception is though is payday lending. I would like for you to take out your credit card statements and read some of the fine print and also review the last payment policies as well as returned check policies or auto debits with insufficient funds when paying credit cards. These fees are outragoues. We got a sniff in one of the debates last month about the 30% interest rate supprt cap between the candidates for the Democratic nomination and the support of the banking industry but both have backed away pushing that debate further.
Fact is there is no more personal responsibility required in going to a cash advance or payday lending company as there is walking into a brick and mortar bank and asking to speak with a loan representative. The question is not payday lending, the question is why is it major banks like Chase, Wachovia, Bank America will not open branches in the neighborhoods of lower income thresolds that may be more inclined to use payday lending. Thiose are not the only ones with cash advance locations however, they are all over the suburbs as well. Living in an area with a total gross income of almost 100K a household within the zip code I can tell you this zip code has five locations scattered along major traffic areas. I would hardly call these locations preying on the poor. Praying on the HOUSE rich and CASH poor maybe, but then these folks again took it upon themselves to purchase these homes they could ill afford and put themselves in the position they are in unfortunately but that another topic.
Credit fees are often higher than payday lending and yet there is no outcry. $15 per 100 borrowed versus paying finance charges plus a late fee of $35 on any balance when you examine the fees is outragoues and yet no one even speaks to those facts....could it be all those campaign contributions?

$28,000 during 2007 alone from payday lenders.

My article shows the top ten recipients of payday lending money.

http://heartlandofvirginia.wor...

House Dem Caucus, Senate Dem Committee and Dick all at the top of the list.

I will be posting again today about all the recipients of this money.

I, T4CHANGE, would like to formally send out an apology to all middle class suburbanites, who make over $40,000 a year, who according to Reggie Jones, (lobbyist for the payday lending industry in Richmond,) were not able to walk down to their local payday lending institution and get a cash advance on Monday, February 4, 2008.  Your local/community payday lending institution employees took a field trip to the General Assembly to support your needs in the community.  To see the mass of statewide payday lending employees sitting in this hearing advocating on your behalf was extremely thoughtful and totally impartial wearing stickers "I choose payday lending".   I appreciate their endearing concern to provide this service for YOU!!

As I sat there at the House Commerce and Labor Committee hearing that day, I wondered, "Are they there for YOU or for their jobs?" Reggie Jones, a lobbyist for the industry, said the proposed legislation would hurt consumers and put about 2,000 people who are employed in Virginia lending offices out of work.  

I am still trying to get my head around how a 36 percent cap on payday loans will lead to unemployment of 2,000 people. Virginia Employment Commission (VEC), you better staff up, since Virginia is a right to work state and a 36 percent rate maybe an implication to unemployment!  

Payday lenders point out their concerns with legislators, such as people accessing loans on the Internet with institutions in the Caribbean.  And the industry continues to put forth two faces, one of concern for the borrowers and the other for the industry's ability to stay in business in Virginia.

So I have this question:  "How many payday lending institutions are posted in suburbia?"  I guess the better question is, "Can anyone tell me where in the state of Virginia that a payday lending institution is in or near the suburbs?"  

What is good for the military is good for all Virginians.  The rate for payday loans now is outrageous and traps our most vulnerable. Cap the rates now at 36% and stop the extra fees.

Called three Payday lending places today during lunch and the most charged for a $500 payday loan is $75. Thats 15%. maybe folks get a better deal down here outside Richmond. I have no idea what the rates are in NVA but I am opposed to any legislation that tells people how many times they can chose to exercise an opportunity. It seems to me that these payday lending companies offer more disclosure than my last closing and I am sure that many Virginians can back that up in lieu of the sub-prime mess we have seen. Oh I guess those firms are "legit" predators so that makes it okay...have you seen the rates for a personal loan at your local bank?

On that loan, you either get it taken out of the $500 or you pay it up front.  So, you get $425 when you need $500 or you pay $75 on top of the $500 for a two week loan.  To start with, if you had the $75 you probably wouldn't need the money.  But on a two week loan, lets get real.  No one in that position should be expected to pay off $500 in two weeks.  So, you have to take out another PDL to cover the payoff of the first, and then another $15 for every $100 borrowed.  This is the beginning of the cycle of debt and where the APR ballons to more than 390%.  Only 1% of PDL customers pay off these things within two weeks, so this should tell you something about how this industry makes it's money.  

The PDL industry claims that they are the only alternative for those in need of emergency cash and they will take the risk on those that traditional lenders would not touch.  That's a load of garbage.  If anything, there are more alternatives now than there were back in 2002 with Credit Unions taking the lead like they did in North Carolina, as well as churches and other non-profit agencies (Goodwill Industries is rumored to be rolling out a low interest small dollar alternative to PDL this year.  If I was a Loan Shark, I could open up my business and undercut these guys.  That's sad when a criminal act is a better deal than the same so-called legitament business.  Also, the study that the supporters and employees of PDLs cited is funded by the industry.  On the VaPERL website are two independent studies that refute the Federal Reserve Bank of NY and the PDL lobbying arm, CFSA (Community Financial Services Association), study.  http://www.virginiafairloans.org  

As far as it not being profitable at 36% or less, that's an even bigger load of garbage.  The credit unions that have a low interest small dollar product are making money off of it.  For example, the North Carolina State Employees Credit Union has a product that only charges 12% APR, payment is due every 30 days and 5% of the payment goes into a savings account for the customer.  It boils down to the business model PDL chooses to practice.  From industry whistleblowers that have come forward, Check-in-Go ran the business as low as 18% APR on a two week loan and they can still make a huge profit.  They made a conscious decision to oppose any rate cap and if one passed in a state they operate in, they close up their stores rather than show they can operate under these conditions.  

Now, does personal responsibility come into play?  Absolutely.  But, being an enabler of self destructive behavior and taking advantage of a person's financial difficulty or lack of financial understanding is just as wrong as people that manipulate the system.  Also Banks, per the Community Reinvestment Act that banks have to comply with, have a responsibility to the communities they operate in.  They know full well that there is a need in the community for products like this but they don't want to serve "those people".  They choose to do fluff projects that look good in a PR campaign and for lack of a better example, sub-contract this business out to PDL companies by underwriting them so that they don't have to get their hands dirty.  The FDIC has a pilot program for low interest small dollar products  like this, that completely insulates the bank from any risk.  They just need to enroll in the program and work with the FDIC to set it up.  

In summation, the Payday Lending Industry is nothing but a bunch of liers.  Oppression in any form angers me, and this is nothing but financial oppression.  This is about breaking the cycle of debt and making this industry fall in line with standard lending practices.  This argument about over draft fees, and late payment penalties from Banks and Credit Card companies has no bearing on the business models and practices of the PDL industry.  For that matter, you only have to pay you credit card bill once a month, why shouldn't you be able to do the same with a Payday Loan?  

Call your legislators, specifically the State Senate, and encourage them to support Del. Oder's HB 12 Substitute bill.  Go to http://legis.state.va.us/ to look up your legislator's contact information.  End the cycle of debt.  

if all this were true then why is it that the payday industry apparently has a lessor delinquent rate or default rate or collection rate than the housing industry right now.
I managed to get the real deal today before leaving the work as found out that one of my co-workers son's of college age had used the payday option as a means for getting money adavance for work on his car. I was informed that not only did he find the situation help and up front and honest that he regularly uses the service and then immediately upon payday pays off the loan and renews for another one. I informed her to inform him that should the new bill pass he would no longer be able to do it even if he wants to and his pay back record his perfect.

There is something really wrong with that when the system can work for those who are honest going in and plan to pay it back on time....you know truth in borrowing...over what we have seen in the mortage market where people inflate and out right lie about finances to get into a house they can ill afford and then wish for all of us to bail them out with federal monies and legislated extensions. My guess is your less inclined to go after those folks or the companies that have caused this crisis in mass in our housing market but want to shut down the payday lending companies.
People in this society should have the options of making determinations themselves as to what they are willing to leave with in terms of terms that are legal and regulated like the payday and banking industry is.  

we are the niggest debtor nation in the world so I wonder just how much of an impact this really has on "breaking the cycle of debt" in this country when we all get credit card invitations on a weekly basis in the mail.

Only 8% of people who use payday loans pay them back right away. The rest find themselves caught in a high interest loan that is almost impossible to break out of.

With such a wonderful payment record, your co-worker's son should get a credit card, or visit a local credit union. He will save a lot of money. He doesn't need a pay-day lender.

More to the point, interest rates that average 350% and reach as high as 750% are morally indefensible -- and please hold your fire on the Libertarian argument of people ought to be free to enter into agreements. People should be free to enter into arms-length transactions where there is rough parity of knowledge on each side of the transaction -- there is a big difference.

Lastly, I don't know what kind of severity rates these lenders experience. They argue they are very high, which  justifies their interest rates, but a loot I took recently at at some publicly-traded ones that had a bad loan allowance of about 5% of loans outstanding, more than most thifts, whose loans would be mainly mortgages.  

its the libetarian notion that government should not be restrictive that you are referring. This business entities were accepted and legitimized by the fact they were allowed some years back to set up shop with the quasi endorsement of lawmakers who must regulate the industry. I fear it is not the platitude of doing something for the poor some of these politicians are interested in but more to the point the pressure that the banking lobbys may be placing on them to get the payday lending entities eventually shut down for good. Lest you forget most libertarians would tell you that the regulating and control of the VA ABC Board for example is an unjustified or warrented mechanism that thrawts the free enterprise system much like any move to shut down payday lending would be. Show me any laws that these payday lenders have broken in the course of doing business. Consumers have the option of going there or to a bank and chose to go there for whatever reason. If a consumer whats liquor in Virginia do they have that option? The answer is no. I am tired of the business community in any industry,even the mortgage in all fairness, getting the blame for the actions of consumers when zero laws have been broken and the business provided full disclosure from jump street.To lump or characterize payday lenders as loan sharks or bookies is way off base; they are in fact tax payers and business tax/fee payers and legitimate business entities that are licensed to do business in Virginia are they not? I doubt the average loan shark or bookie can say that.

I'm going to try to avoid the whole libertarian argument, because I think it leads nowhere except to a point where we have to agree to disagree.

Whether payday lenders, or their kissing cousins, car-title lenders, have broken the law miss the point. The issue is the law itself.

Just because giving a loan to a person on a fixed income at 400% interest is legal, it doesn't make it right. These businesses work not because people are making free decisions about their own well-being, but because they prey upon the most financially desperate and often least financially sophisticated members of our communities.

In preying upon folks who are desperate, these payday lenders are no different than loan sharks (and please, don't put bookies in the same classification -- they are completely different).

As for the mortgage business, yes, our current problems result in large part from the greed of borrowers, who thought they were gaming the system and getting something for nothing. But, Alter, many well-intentioned people found themselves caught up in financial difficulty not because of greed, but because there was not full disclosure and because people did not fully understand the transactions into which they were entering.  

    As a native Virginian, I can't believe I live in a place that allows this exploitative predatory lending to persist.  Three of our neighboring states have been able to pass laws banning or severely restricting payday lending.  Maryland has capped APR rates for loans under $6000 at 33%, making it virtually impossible for predatory lending companies to exist in the state.  In West Virginia, payday lending is basically illegal and the new laws require that approximately $616,000 in defaulted loans owed by 2,700 West Virginians be forgiven.  Likewise, there are no payday lenders working legally in the state of North Carolina.  Since this legislation passed, many North Carolina citizens have been getting loan offers from outside the state.  As a result, Commissioner Joseph A. Smith recently prohibited a major loan company, Advance America, from doing business in North Carolina.  Even Georgia passed legislation that put an APR cap at 16%, and as a result, Georgia does not have any payday lenders.

Get on the ball General Assembly!  The House of Delegates has already passed a bill putting a 36% cap on payday loans.  Now it's the State Senate's turn to pass it.  Listen to your fellow legislators, your neighboring states, and most importantly the citizens of Virginia, and get rid of these crooked payday lenders!
   

But be cautioned, the 36% cap passed by the Hod is a bit of an illusion -- see Lowell's initial post, above.

From the several delegates and senators with whom I've discussed the issue, I think all are ready to agree to a compromise if it will make this issue go away.

People who care about this issue a great deal have told me that this compromise is worthwhile, so lets take what we can get. Still, I can't shake the feeling that it skirts the central issue --that this predatory lending is immoral and has no place in civilized society.

And to the extent that folks need loans to tide them over, let's figure out a way to help these folks, but let's not condone a practice that 9 times out of 10 makes the financial situation of these people more desperate.

The house has the right idea on the payday loan issue.  They are protecting consumers.  The Senate, however, is bending to the industry pressure and not protecting citizens adequately...even with public opinion clearly stating we've had enough with these payday loans. They are ripping people off and taking advantage of those in vulnerable situations.  There are alternatives so that arguement does not fly.  Senate, follow the House's lead and DO THE RIGHT THING! Don't let political games and the need to claim credit the driving force. Do the just and moral thing and go with the House's version, HB12!