Stirring things up in VA
January 4, 2009 | Daily Press, VAs Against Payday Loans, Virginia, industry, industry critics, media coverage, regulation | Comments (0)The Virginia Daily Press is in a tizzy because payday lenders are innovating and changing their service to make sure they can stay in business:
For example, in September payday lenders received permission from the State Corporation Commission to offer open-end loans at their payday loan locations. Open-end loans are loans with no set time of repayment. The borrower is only required to make a periodic minimum payment, and the loan can continue in perpetuity. The biggest payday lender in Virginia started doing open-end loans on Dec. 1, charging an interest rate of 365 percent if the borrower allows the lender to automatically deduct payments from his account and 456 percent if he doesn’t.
So they got permission from government regulators to change their service. How brazen?
The critics have things exactly backwards. During this period when credit will remain tight, payday lenders are a valuable source of credit for working people.
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