Some are hoping this will finally be the year that lawmakers crack down on high-interest lenders now that Democrats are taking control of the General Assembly.
People who advocate for restrictions on what they call predatory lending often feel like they’re playing a game of whack-a-mole. They come up with a new restriction on payday lending, and business move to car-title lending. Then they come up with a new restriction on car-title lending business move to internet lending.
Dana Wiggins at the Virginia Poverty Law Center says she’s been working with lawmakers to craft a comprehensive approach to close all the loopholes.
“It just reforms it by putting our costs in line with the costs of some other states like Colorado and Ohio," Wiggins explains. "Where some of the same lenders are offering the same loans but for approximately three times cheaper in those states for the very same products.”
High-interest lenders have been stepping up their campaign contributions in recent years. And, Bob Denton at Virginia Tech says that has an influence.
“And there’s no question that when it comes to car-title lenders that has been controversial, and Republicans have protected that industry by and large,” says Denton.
But high-interest lenders give to Democrats as well as Republicans. So the effort to close all the loopholes this year might not be as easy as figuring out where all the loopholes might exist and closing them.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
