Families are struggling more than ever to pay their bills during the current economic crisis. So payday lenders have sprouted up to serve people who want quick loans and checks cashed. But what do these lenders really cost people and society?
A lot, say legislators and advocates for lower-income Virginians.
Not only do payday loans cost consumers a significant amount of money, but the costs extend to the community at large, said Delegate Glenn Oder, R-Newport News.
Last week, Oder held a press conference to discuss the effects of payday lenders and to outline two bills targeting them. Oder was joined by Delegate John O’Bannon, R-Henrico, and Sen. Donald McEachin, D-Richmond.
“The notion of predatory lending, the fact that we allow it to exist, speaks to our moral values. It speaks to who we are as Virginians,” McEachin said. “This plague on our society, this plague on us as Virginians, needs to be eradicated.”
Oder’s proposals, which are co-sponsored by O’Bannon, are:
• House Bill 412. It would authorize a local government to adopt a resolution or ordinance that “reasonably limits the number of payday lenders and of lenders engaged in the business of making secured or unsecured open-end loans that may operate within the locality.”
• HB 413. It “authorizes a locality to adopt an ordinance requiring that a special exception or a special use permit be obtained before a payday lender makes a payday loan from a location within the locality.”
The bills would let local officials – such as city councils and county supervisors – limit payday lenders in their communities. O’Bannon noted that there often are tensions between federal and state governments and between state and local governments.
“Here’s an opportunity for us to give the powers back to the localities that they will use,” he said.
