Good Job Justin

By: Lowell
Published On: 4/21/2008 7:48:38 AM

I'm very glad to see this:

Alexandria is proposing to impose a steep new tax on payday lenders operating within the city, but the industry is vowing to fight the measure.

Under a plan proposed by City Council member Justin Wilson, the city would use the money to offer consumer education services to low-income people who are taking out the high-interest, short-term loans.

"Here you have a business that preys on low-income folks and their weaknesses," Wilson (D) said. "These lenders have a very detrimental effect on our community in perpetuating the cycle of poverty."

Exactly right, Justin, that's what the payday lending industry does -- "preys on low-income folks" and helps perpetuate "the cycle of poverty" in communities.  Those are two good reasons why payday loans were illegal in Virginia until 2002, when the General Assembly foolishly allowed the payday lenders to start making loans at interest rates as high as 391%.  

Fortunately, we saw significant reforms enacted this year in Virginia, under which borrowers "would not pay annual interest rates of more than 36 percent, although other fees would increase."  That's a great start, but more action is needed. That's why I'm happy to see Alexandria moving in the direction it's heading.  Good job, Justin...keep it up!

Comments



Correct and Gutsy Move (Matt H - 4/21/2008 9:34:21 AM)
Especially since the City's state pols all take money from the industry.


Oh, no, Justin (aznew - 4/21/2008 9:36:40 AM)
The payday lending industry is providing money to these folks at 300% + interest rates only in order to help them out.

Why do you want to take that away?



Brian Moran's '07 Payday Lender Contributions (Matt H - 4/21/2008 10:58:33 AM)
I hope Justing doesn't get eaten. :)

From the '07 cycle according the VPAP for Moran:

Loan Max $4,500
Ace Cash Express $1,500
Advance America Cash Advance $1,500
Title Max $1,500
Check Into Cash of Va. $1,000

http://www.vpap.org/cands/cand...

No pun intending, but how can this go unchecked?  Are you proud?



Great Job Justin!! (proudvadem - 4/21/2008 11:23:40 AM)
 These are some great first steps and I hope other cities follow through.



Pay Day Loans (South County - 4/21/2008 10:22:32 PM)
I was present recently at a briefing by a representative of the VA State Corporation Commission (SCC) on payday lenders.  It is absolutely correct that these loans prey on lower-income folks.  As of April 2008, there are 88 companies licensed by the state, operating 757 branch offices.  The Dept. of Defense has initiated a big push against payday loans, resulting in protections for military members, restricting interest to 36%.  The state legislature also came in at the 36% level.  I'd like to see that cap cut even further, more restrictions put on these loans, or even outlawing payday loans all together.  It is correct that consumer education and publicity on the dire consequences of these loans is needed, as they perpetuate the cycle of debt that makes it hard for folks to break out of.