Lawmakers in Richmond are considering a bill that would crack down on fees attached to loans that critics call predatory.
One day back in 2015, Donald Garrett of Richmond realized something had to give. His bills had gotten out ahead of him and he couldn’t keep up. All he needed was a hundred dollars or so, and so he went to a place he heard about on the bus — Advance Till Payday. He eventually took an "interest free" loan for $100 and eventually forked over $200. But that wasn’t the end of the story. One day while he was receiving a dialysis treatment, he got a call.
“And he told me that I have a balance of $260 outstanding because of the $80 a month membership fee. Where did that come from? Nobody mentioned that when they gave me the $100.”
Companies like Advance Till Payday make a habit of hitting up people like Garrett with all kinds of fees, a practice that Republican Delegate Peter Farrell wants to crack down.
“It’s a population that may not have the fiscal wherewithal to understand exactly what’s happening until they really start getting money taken out of their pocket.”
Farrell’s bill would cap the amount that lenders can charge when they take out a loan to 5 percent of the amount borrowed.