Lending reform bill passes Va. Senate |
|
|
|
Published
:
Fri, 26 Jan 2007 20:41
|
RICHMOND, Va. (AFX) - Legislation to reform the payday loan industry passed the Senate Friday, as the House has yet to consider its own legislation dealing with the short-term, high-interest loans.The Senate passed 35-2 a bill that would limit a borrower to three payday loans at a time, require a 24-hour cooling-off period between loans and set up 60-day extended pay plans for those who take out three loans within five days.A statewide database would be created to track the loans under Sen. Richard L. Saslaw's bill.Measures in the Senate to repeal the 2002 law that opened the door to the payday loan industry failed in favor of the reforms. The Payday Loan Act allowed lenders to charge interest rates exceeding the 36 percent cap other lending institutions face.'If you don't like payday lending, the question is do we reform it and improve it or leave it the way it is?' said Sen. John Edwards, D-Roanoke, who a day before offered several amendments to further crack down on the industry that were defeated.Ten payday lending bills -- six to reform the industry and four in favor of repeal -- await action in the House. The last day for each chamber to complete work on its own legislation is Feb. 6.Payday loans work by allowing a borrower to write a check up to $500, plus a fee for $15 for every $100 borrowed. The company holds the check until the customer's next payday, when he or she either pays off the loan or the lender cashes the check.The industry has said capping the interest at 36 percent would put lenders out of business.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
|
|
Print this Story
Minimum wage bill stalls in the Senate 