Monday, 26 January, 2009
Legislation blocking a perceived end-run by payday lenders on restrictions that took effect 25 days ago is headed to the floor of the Virginia Senate.
Voting 9-1, the Senate Commerce and Labor Committee endorsed a bill that prevents payday lenders from offering open-ended payday loans that could carry sky's-the-limit interest rates.
The bill is sponsored by Senate Majority Leader Richard L. Saslaw, D-Fairfax.
Last year, Saslaw defended payday lenders against an all-out push to rein in the high-cost, instant-loan industry.
With Saslaw's aid, the industry won restrictions more to its liking. But even before the new rules took place, payday lenders moved to offer costlier loans not covered by the 2008 restrictions.
That infuriated Saslaw, who said that the industry's maneuver had severely damaged its credibility in Virginia.
Saslaw's bill requires that payday lenders offer their signature loans or open-ended loans, but not those. Senators said they were concerned that if Saslaw's measure becomes law, lenders will drop their payday licenses and get into open-ended loans altogether.
Source: timesdispatch.com
