Virginia Legislator Fails Against Payday Loan Companies
Another great article from Payday Loan times on the the Virginia court ruling on payday loan companies accused of predatory lending practices.
What more evidence do they need?
The state legislators who are so willing to do the bidding of a predatory business should check the latest evidence. The numbers for 2006 are in, and what they reveal is that the amount of misery and destruction wrought by faxless payday advance lenders is growing.
These short-term lenders tempt people in distress to take a step that too often pushes them down a financial rabbit hole, one it’s hard to climb out of. They prey on people in crises, with few resources. They charge fees that are flagrantly usurious: The average rate on a fast payday loan in Virginia last year, expressed as an annual percentage rate, was 368 percent, and they went as high as 782 percent.
No matter how the industry’s lobbyists spin it, these are Tony Soprano numbers.
Add in all these conditions, and you have a situation in which borrowers take on loans they can’t repay. So they roll them over, again and again, until their obligation grows so unsupportable it pushes them over the brink.
Legislators had plenty of chances this year to fix the mess they created when they invited providers of faxless payday loans into Virginia. They had good bills before them, to bring the interest rate down to a level that passes the conscience test, the same 36 percent that applies to other small consumer loans and to payday lending to the military.
While the payday lending industry likes to say it simply offers a solution to short-term needs that people should and do use prudently, the data prove otherwise. The typical Virginian who took out a guaranteed payday loan in 2006 ended up taking out 8.3 loans. Two-thirds of the 433,537 borrowers took out more than one loan.
While there were slightly fewer borrowers last year, they borrowed more money, and more often. That’s dangerous.
And 96,831 Virginians took out at least 13 payday cash advances – a condition that could be described as an addiction. That’s 96,831 pieces of evidence that the General Assembly is letting Virginians down, letting down those who most need protection.
[Via Payday Loan Times]
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