3 D’s Join R’s in Supporting Triple Digit Interest
SB 20 Open-end loan plans; caps finance charges and fees that may be charged on extension of credit.
Senate: Failed to report (defeated) in Commerce and Labor (6-Y 9-N)
YEAS–Colgan, Miller, Y.B., Edwards, Herring, McEachin, Deeds–6.
NAYS–Saslaw, Wampler, Norment, Stosch, Watkins, Wagner, Newman, Puckett, Puller–9.
ABSTENTIONS–0.
Senators Saslaw, Puckett, and Puller joined Republicans in Senate C&L in supporting car title interest rates at over 300% interest.
Even though the majority of Democrats on the committee agree with Senator Mamie Locke that interest on secured loans should never be higher than 36%, the majority leader, a SWVA banker, and a NOVA legislator disagreed.
Predatory lender lobbyists swarm Senator Saslaw
On the subject of payday loan interest caps the payday lenders picked up Senator Edwards as well:
SB 21 Payday loans; limiting interest to a maximum annual rate of 36 percent.
02/15/10 Senate: Failed to report (defeated) in Commerce and Labor (5-Y 10-N)
YEAS–Colgan, Miller, Y.B., Herring, McEachin, Deeds–5.
NAYS–Saslaw, Wampler, Norment, Stosch, Edwards, Watkins, Wagner, Newman, Puckett, Puller–10.
ABSTENTIONS–0.
Watch a video below of a car-title lending victim speaking about her brutal experience:
As a Virginian of faith, I’m thankful to Sens. Saslaw et al for once again refusing to give in to the loud but uninformed voices who year after year are intent on taking away the ability of those most in need around us to obtain short-term loans when they are in most deperate need of them.
As has been said every time this proposal comes up, the reality here is that the terms of these loans are market driven based on risk. The price (in this case the interest rate and other terms such as penalties) is set by the market (NOT the lender) based on the risk profile of the person seeking the payday loan. However noble their intentions might be, if somebody steps in and tries to put an artificial cap on things like penalties and how much interest can accrue over time when someone breaks their commitment to pay these loans back, it is not going to make things easier for people who occasionally need these loans- its going to hurt, drastically, their ability to get them when they are most in need and therefore present the hihest risk. No lender is just going to shrug their shoulders and just give out the loan anyway with some government-mandated cap on it; they will simply NOT GIVE OUT THE LOAN. They will make their money somewhere else, on some less risky contract, and then the poor person with nowhere else to turn has to walk away with nothing.
Let’s be clear- the real victims here are not the people who enter into loans, don’t pay a dime of them back, drive up the rates on other poor and middle class folks and then go whining about “ursury” and being preyed upon. The real victims are the poor people who borrow responsibly but may one day not be able to get a loan when they’re in their hour of greatest need because people like you think YOU are a better judge of what loan arrangements they should and should not be allowed to enter into then THEY are.
David – can you give me a sense of how the industry you are defending, “as a person of faith,” is risking their dollars given that title loans are secured with the title of a car? In what way does a loan that is collateralized justify an interest rate above the usury limit? Maybe you are saying that there should be no usury limits at all and that the market should drive all costs like gas prices after a hurricane? If this is the case we simply disagree and I think mainstream America concurs.
While our intention is to be an advocate for consumers, you seem more concerned with ensuring predatory lenders can continue to make money off the backs of the poor. Please help me to to rectify this with the tenants of faith. I can not find that anywhere in the Gospels that I read.
It sounds like you are a little confused about the scope of SB21 and the types of payday loans it would have applied to. Even in cases where loans to the destitute are “secured”, it’s really quite naïve to insist that having a piece of paper with some car information on it stuffed in a desk drawer somehow magically relieves lenders of all risks associated with making loans to those out on the street with nothing (particularly when the businesses themselves are not backed by physical assets). It’s equally naïve to insist that not allowing them to match terms with market risk premiums will somehow not affect the ability for many people to acquire the loans when they need them- it will. It has nothing to do with hurricanes, it’s just the basic and well-proven principles of the lending markets.
Meanwhile your personal attacks on me as someone who’s “interested in making money off the backs of the poor” is really quite pathetic. I’m not an advocate of any kind for the payday loan industry nor do I have any skin in the game whatsoever outside of defending the poor people whose freedom to enter into the lending agreements of their choosing and whose ability to get help when they desperately need it is being infringed upon by the self-righteous. So you see “Reverend” Smith, I am the one advocating for the consumers while you are merely advocating on behalf of your own narrow political ideology. The guy in the Gospels I read wouldn’t use religion as a tool for pushing a partisan agenda nor would he use it as a forum to repeatedly smear political opponents such as Bill Howell. You can slap a collar on yourself and pretend your own personal anti- free market politics is really just the moral output of some lofty “interfaith center” but you’re not fooling anyone. You don’t speak for all people of faith, you only speak for those who share your worldview and for the interests that want tax writeoffs on their contributions to left-wing political causes. I wish you the best of luck with that, but if the outcome of this bill is any indication I’d say it’s not really going so well.
Come on, David – would you agree that the slip of paper that you refer to, I call it a vehicle title, is being used as collateral?
Collateral secures a loan, does it not? If there is collateral, worth more than the actual loan, I believe that the loan is technically secured pretty well.
As for the remainder of your demonizing scree, I will let that pass as an act of grace. I simply want to talk about the issue, and how it is informed by your faith if you feel compelled to offer that.
p.s. when did you see us partisan? The article you are commenting on is actually critical of Democrats.