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New Virginia Law Aims To Curb Predatory Payday Lending
Lobbyists for the car title loan industry have made sure to shower their generosity on both sides of the aisle.
AUG 3, 3:04 PM
New Virginia Law Aims To Curb Predatory Payday Lending
Mikaela Lefrak
For years, payday and car title lenders in Virginia could charge borrowers exponentially higher interest rates than lenders in other states. As a result, Virginia has among the highest vehicle repossession rates in the county.
A new law in the commonwealth aims to curb predatory lending practices by limiting the annual rate of interest to 36% plus a monthly service fee. By comparison, the current average annual rate is 251% for payday loans and 217% for title loans.
Lawmakers held a ceremonial bill-signing for the Virginia Fairness in Lending Act Monday in Richmond.
{snip}
Northam successfully pushed for the law to go into effect on January 1, 2021, rather than the following July. At the bill-signing ceremony, he called the former rates of return for lending companies “out of control.”
The new law, passed by the Virginia General Assembly earlier this year, includes several measures that aim to protect Virginians from predatory lending practices. Under the current system, lenders can charge excessively high interest rates and often trap borrowers into debt.
The commonwealth has long been seen as a sanctuary for predatory lenders, despite previous legislation that aimed to curb the practice. According to the Virginia Poverty Law Center, Virginia has some of the weakest consumer protections in the country. (The law center helped draft the legislation.)
Car-title loans are often a last resort for economically vulnerable residents who do not have good enough credit to qualify for credit cards.
{snip}
New Virginia Law Aims To Curb Predatory Payday Lending
Mikaela Lefrak
For years, payday and car title lenders in Virginia could charge borrowers exponentially higher interest rates than lenders in other states. As a result, Virginia has among the highest vehicle repossession rates in the county.
A new law in the commonwealth aims to curb predatory lending practices by limiting the annual rate of interest to 36% plus a monthly service fee. By comparison, the current average annual rate is 251% for payday loans and 217% for title loans.
Lawmakers held a ceremonial bill-signing for the Virginia Fairness in Lending Act Monday in Richmond.
{snip}
Northam successfully pushed for the law to go into effect on January 1, 2021, rather than the following July. At the bill-signing ceremony, he called the former rates of return for lending companies “out of control.”
The new law, passed by the Virginia General Assembly earlier this year, includes several measures that aim to protect Virginians from predatory lending practices. Under the current system, lenders can charge excessively high interest rates and often trap borrowers into debt.
The commonwealth has long been seen as a sanctuary for predatory lenders, despite previous legislation that aimed to curb the practice. According to the Virginia Poverty Law Center, Virginia has some of the weakest consumer protections in the country. (The law center helped draft the legislation.)
Car-title loans are often a last resort for economically vulnerable residents who do not have good enough credit to qualify for credit cards.
{snip}
1 replies
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