The payday loan industry in Virginia could be undergoing some changes after state lawmakers yesterday announced a compromise on how many loans can be borrowed and when.
Lawmakers say this compromise is for the good of the commonwealth, but representatives of the payday loan industry fear it will forced out of the state under the new provisions.
Under this compromise, borrowers who seek payday loans would have longer to repay, but could only take out at most five loans a year.
In addition, the interest rate on a loan would be capped at 36 percent, but lenders could still charge other fees similar to those they already require.
Some payday lenders criticized the proposal, saying it was confusing.
“At first blush this doesn't seem like a compromise that the industry would be supportive of,” said Jaime Fulmer, a representative of lender Advance America. “Unfortunately again, that puts the 2,000-plus people that work in the commonwealth at some peril.”
Delegate John O’Bannon of Henrico, however, called the reforms robust, saying they would “break the cycle of debt” that many borrowers fall into.
If the reforms take effect, a database would track payday loans to make sure a borrower isn't taking out more than one loan at a time and no more than the set limit.
The full Senate could debate payday loan reforms this week. Meanwhile, the measure will be heard in a House committee today.
source:http://www.nbc12.com/news/state/15307956.html
