General Assembly
9:48 am
Fri February 15, 2013

Payday Lending

Many lawmakers and advocates still have abolishing predatory lending practices in Virginia on their agenda… although it hasn't been discussed much this legislative session. But one organization says that since the General Assembly passed reforms, fewer people have been trapped by the high-interest loans that were supposed to be temporary assistance for those with a financial crisis.

The Virginia Partnership to Encourage Responsible Lending says the number of payday lending institutions has declined from 769 in 2008 to 267 in 2011.  470,000 loans were made in 2011 compared to 3.3 million in 2008.  But more title loan, Internet, and open-end credit lending agencies that charge high fees and interest rates are now doing business.  The Virginia Credit Union League’s Louis Wood says those lenders prey on people who think they have no recourse.  But he says most don't know that credit unions offer alternatives. 

 

VaPerl members say they’re being proactive in educating people about alternatives to predatory lenders, but it will take time. They're pursuing legislation to crack down on Internet lending—which IS illegal, but uses loopholes that must be closed.