VA payday lending bill puts consumers at risk
March 7, 2008 | Virginia, customers, industry, states | Comments (0)Virginia’s General Assembly has moved a payday advance bill to the desk of Gov. Tim Kaine that restricts consumer choice on when and how often consumers may have access to credit. The measure, which Kaine has indicated he will sign, includes a complicated schedule of new loan applications and makes it illegal for a consumer to take out more than five loans in a 180 day period.
Jamie Fulner with payday advance company Advance America summed up the risk to consumers by pointing out how the new restrictions could force working families into more costly personal finance alternatives:
“If (consumers) decide that in a 180 day period that they need a sixth payday loan to help them bridge the gap between paychecks and that option is not available to them any longer then they may be force to turn to more expensive options such as bouncing a check or paying their overdraft protection fees or paying their bills late.”
The Federal Reserve Bank of New York has already conducted an in-depth study of the problems consumers face when payday advances are banned in certain states, and it’s not known how much pain the new restrictions will cause borrowers in Virginia. But one thing’s for sure – the words of Judge Gideon J. Tucker never rang truer when, in 1866, he observed:
“No man’s life, liberty or property are safe while the legislature is in session.”
Amen to that, your honor.
