Terry McAuliffe is starting a pile-on by Democratic gubernatorial candidates of the high-interest instant-loan industry, proposing the state kick out payday lenders.

“We need to shut them all down; they only shove people into worse economic conditions,” McAuliffe said yesterday.

I’ll bet anything that McAuliffe doesn’t know what a a payday loan is.

The House and the Senate are falling in line behind the latest clampdown on high-cost, instant loans, with both sides moving toward floor votes during the next several days.

The Senate Commerce and Labor Committee, following the lead of its House counterpart, yesterday backed legislation blocking an end-run by payday lenders on restrictions approved last year but took effect less than two months ago.

Nearly three-quarters of more than 800 money stores in Virginia have been authorized by the State Corporation Commission to offer open-ended loans that exceed the $500 maximum for payday loans and carry virtually unlimited fees.

The latest move by the General Assembly against lenders, who have spent millions on lobbying, advertising and campaign contributions, is designed to confine most of them to payday loans.

And the legislation is designed to force Virginians into few choice for short-term credit.  

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?

Jamie Fulmer, spokesman for the nation’s largest payday lender, Advance America, said unregulated, open-end loans are necessary to keep fastcash stores profitable and to meet the needs of some borrowers.

“In these times, when credit is more difficult, we need to provide as many options as possible,” Fulmer said.

“It sees to me such an obvious slap in the face of legislators,” James W. “Jay” Speer of the Virginia Poverty Law Center said of the industry’s latest loan products.

Lenders got the okay from the State Corporation Commission.  How is that a slap in the face to anyone?