Here are two stories that pretty much cover what’s the fight is about in Virginia, followed by a guest opinion piece by Advance America CEO Ken Compton.  Washington Times & Richmond Times Dispatch. 

From Ken Comption’s piece also in the Richmond Times Dispatch:

Amid this economic backdrop, our company, Advance America, recently began offering a new credit product to serve our customers in Virginia — in addition to the modified payday advance product introduced this year.

Our supplemental product — a line of credit between $500 and $750 — was approved for sale by the State Corporation Commission. It affords consumers more flexibility, a higher loan amount, and a longer term of repayment — with the requirement that they continually pay down principal. We believe that it provides consumers, many of whom have limited credit options, a critical choice to help them manage their financial obligations.

Despite recent criticism, it was never our intention to circumvent the new payday loan reform law. Indeed, the line of credit product is not new to Virginia; a variety of businesses have offered it for years. And Advance America continues to make payday advances available at all of our stores.

Of course, the voice that is always left out of payday lending debates is the customers’ voice.  They now have an even greater choice of financial services.  How could the legislature object to that?

 agree with the idea that one national set of rules and licenses would be great.

The only point I would clarify is that you cannot regulate offshore internet companies. What are you going to do if they break the rules – send someone to another nation to arrest them?

Nevertheless, a unified, sensible set of rules and viable brick and mortar stores would go a long way toward eliminating offshore operators.

Covered by the Webster City News, in one corner, Victor Elias, senior associate at The Child and Family Police Center.  In the other,  Jeff Kursman, Director of Public Relations for the company Check ‘n Go.

A reader dissents from my comments in the post below about federal regulation:

It would be nice if there were a federal body to regulate payday lending. There would be one set of rules and one regulatory body overseeing it. Multi-state lenders would have lower costs and could pass that on to the customer with lower rates. Competition would drive down the cost to consumers, too. It would give legitimacy to the product, give higher protecton to consumers, and drive the bad apples out of business. All the talk about ‘internet’ and ‘overseas’ lenders would stop, because they would all have to register with the federal government. There would be no jurisdictional issues.

Plus, we can get rid of these state regulators who are not always the most competent or impartial bunch. Local politics would not affect the regulation of this business anymore.

CNN has a story: “What Consumer Advocates Want From Obama.” 

Here are some other issues he {Consumers Union spokesperson} says need attention:

• Consumers need effective regulation of financial-services products, including an agency independent of banks to protect consumers. This regulation would focus on products like mortgages, payday loans and annuities. Watch Ali Velshi on what Obama should do first »

• Make credit products agreements easier to understand and appropriate for the consumer. End “gotcha” fees and interest-rate spikes. Recently, the Federal Reserve ordered a crackdown on some controversial credit card practices, but those changes won’t take effect until 2010. Butler says that’s too long. His organization wants these changes take effect within three months.

For the most part, payday lenders are on the same page.  No service has more transparency than a payday loan.   Another government agency, though?  Won’t that tread on the traditional role of states in regulating consumer lending?    

Out with chai lattes (whatever they are); in with personal care products.  It’s all on Walletpop.

The Payday Pundit is changing his spending habits by reducing his “travel to see relatives” budget and increasing the quality of his liquor purchases.   

Introduced in the Congress yesterday: 

Banning retroactive rate increases on existing balances for cardholders in good standing. (Rates could still be raised if a customer were more than 30 days late with a payment.)

Requiring a 45-day notice for rate increases on new charges.

Banning “double-cycle billing,” in which fees are charged for balances that have already been paid off.

Allowing cardholders to cap how much they can charge to their cards, to avoid overdraft fees.

Outlawing “universal default” clauses, which automatically hike rates based on unrelated financial activity (such as being late paying another bill).

From today’s Seattle Post-Intelligencer: 

State Rep. Sherry Appleton, D-Poulsbo, says the country’s and state’s dire economic situation may help her bill this year. If it doesn’t, she expects an initiative on the ballot soon, a proposal that would pass easily like measures in other states.

In previous years, Appleton’s bills were supported by many groups, but the measures failed to make it out of committee.

This year, Appleton is also introducing a bill that would completely prohibit payday lending, she said.

“If the Legislature wants to have control, they’re going to have to step up to the plate and play, if not I think we will see an initiative and it will pass.”

Bassford, whose company employees more than 600 people, says capping in the interest rate at 36 percent will force job cuts.

There are more than 24,000 payday branches nationwide operated by hundreds of companies, employing more than 50,000 people, according to the industry group. Industry-wide, sales reached $50 billion in 2008.

Washington state has traditionally supported consumer choice and been reluctant to pass legislation that caps interest rates.   We don’t have any indication that Rep. Appleton’s bill will get any more traction this year than in previous years, but we’ll keep you posted.

A Wisconsin lawmaker compares payday lenders to “black widow spiders.”   We love that the head of Prospera Credit Union urges lawmakers to “tread carefully.”  Maybe that’s because the Goodwill/Prospera payday loan “alternative” charges 252% interest and would be derailed by any rate cap.  From the story:

Rep. Marlin Schneider, D-Wisconsin Rapids, plans to introduce legislation in the next couple of weeks that would cap interest rates on payday and car title loans at 2 percent a month.

“What I’m hoping to do is get some regulation of these characters,” Schneider told The Post-Crescent. “Just about everybody in the world should stay away from them. They charge interest rates up to 1,000 percent.”

Prospera Credit Union CEO Ken Eiden said he’s all for consumer protection, but urges lawmakers to tread carefully. He cites a recent American Payroll Association survey, which found more than 70 percent of American workers live paycheck to paycheck.

People usually resort to payday loans when they’re in financial crisis, and, Eiden says, there’s a lot of that going around right now. Some states have enacted legislation that forced out bricks and mortar payday lenders, leaving desperate borrowers to look for other options, including Internet outfits based in the Caribbean and Central America.

People are talking compromise in Arizona.  From the story:

Mesa remains opposed to extending or eliminating an upcoming deadline that will end licensing of the payday lending industry.

However, Mayor Scott Smith said Thursday that if a compromise is struck in the Legislature, communities should get better control over where the businesses can be located.

But…

Sen. Debbie McCune Davis, D-Phoenix, a strong critic of the payday loan industry, said she’s not interested in any form of a compromise.

“I’m not interested in talking about anything other than the 36 percent cap. That’s the only position I’m willing to discuss,” Davis said.

“Compromise” “bipartisanship “peace” are words that people like when it’s the other side capitulating to achieve one of these principles.