Thursday, 01January, 2009
The day significant changes come to these payday lenders they’re closed, but when the doors re-open the new state regulations will be in effect. Starting January 1, 2009 those seeking fast payday loans will be restricted to just one at a time and they’ll have longer to pay it off. The changes are the state’s effort to protect Virginians from making risky financial decisions.
“People are getting more than one payday loan, sometimes four or five payday loans at a time, not able to pay them back, continuing to drag it out to the point they find themselves in a cycle of debt they can not get out of,” said Senator John Edwards, (D)-21st District.
Despite state lawmakers’ efforts, some say these businesses are finding new ways to keep people coming back for more. They’re now offering open ended credit lines, where for the first 25 days the borrower owes nothing, but then the lender can charge what ever they want.
“Now that they find the laws are pretty astringent they’re trying to get around the laws and we’ll just see how that develops,” explained Edwards. Since short-term loans were made legal in 2002, the issue has come up several times before legislators. With new laws only forcing new ways to loan, Edwards says it may not be over yet. “I’m afraid this is not the end of it and we’ll have to come back revisit the whole payday lending system in the future,” Edwards said.
Source: www.wsls.com
