No job? No credit? No problem, borrowers can go online to get a loan — and pay five thousand percent interest. But, as Michael Pope reports, that era might be coming to a close.
Walk into a brick-and-mortar storefront location to get a car-title loan or a payday loan and the lender has all kinds of restrictions, from the interest rate to how long the loan can be to whether or not the lender has access to your bank account. But go online and it’s the Wild West. Over the summer, industry leaders have been meeting with advocates like Jay Speer at the Virginia Poverty Law Center to craft new regulations for online loans.
“The good news is that the attorney general’s office, consumer advocates like me who represent borrowers who are screwed over by the payday and the car-title lenders and the consumer finance companies all seem to be on the same page.”
Delegate Mark Levine of Alexandria says he may end up crafting a proposal before the next time work group meets in September.
“I’m hopeful that we are going to put some regulation on the exorbitant loans that are coming in from out of state.”
The work group was created earlier this year when lawmakers expressed concern that online lenders were using a loophole in the law to evade consumer protections that apply to lenders who operate brick-and-mortar stores in Virginia.