Both sides in the payday-lending fight are being told to try again to cut a deal.
Del. Terry G. Kilgore, R-Scott, chairman of the House Commerce and Labor Committee, wants lenders and their foes to attempt to reach terms on legislation cleaning up the image of the high-cost, instant-loan industry.
Kilgore, an ally of payday lenders, said Friday that lawyers, lobbyists and activists could begin talks this week. Even if negotiations are unsuccessful, the committee is likely to send a bill to the House, he said.
Previous talks - this past summer and during the 2007 General Assembly - failed because neither camp would budge on a 36 percent interest-rate cap.
Numerous bills are pending in the House and the Senate. Many are punitive, but others are accommodating of lenders.
Friday, Del. Mark D. Sickles, D-Fairfax, who has taken contributions from the industry, proposed legislation to limit loans to $1,000 or 25 percent of an individual’s gross monthly income. The bill does not include an interest cap.
The industry claims limiting rates to 36 percent would reduce returns to pennies on the dollar, and put lenders out of business. Currently, lenders charge $15 per $100 borrowed, with loans limited to $500. However loans can be rolled over if they’re not paid off on time. The effect of which is hefty debts that often take months, if not years to repay.
Gov. Timothy M. Kaine, who favors a 36 percent cap but has said it might not be the only solution, is expected to monitor the latest talks. However, it was not clear whether a member of his staff would directly participate.
"We would be glad to get involved if people thought that was helpful," said Delacey Skinner, Kaine communications director.
Kaine - through his chief lobbyist, Marc Rubin, attempted to broker a deal on payday-lending reforms - but industry opponents refused to participate.
Talks also went no where last winter.
The industry pulled legislation it had largely written to address concerns about lending practices for fear of losing on a 36 percent limit, if it were put to a single up-or-down vote on a Kaine-authored amendment.
Lenders are spending millions of dollars on campaign contributions, lobbying and a nearly nonstop advertising and grass-roots push to stop restrictions that - the industry claims - would drive them out of Virginia.
The state was opened to payday lending in 2002. Since then, the industry here has grown quickly, prompting concerns by faith, community and business leaders that spiraling debt among customers disrupts families and can spill into the workplace.
Kilgore and his committee aren’t the only obstacle to a clampdown on payday lenders.
Senate Majority Leader Richard L. Saslaw, D-Fairfax, chairman of the Senate Commerce and Labor Committee, is close with many of the industry’s top lobbyists and last year carried its bill.
Source:
http://www.newsvirginian.com/
