State lawmakers consider regulations for payday lending apps
Opponents of payday lending are worried about a bill making its way through the House of Delegates.
Getting quick cash based on hours you've already worked. There's an app for that, and now the emergence of this new financial technology product is leading lawmakers here in Richmond to start thinking about state regulations for this growing market.
Republican Delegate Amanda Batten from James City County has a bill creating new fin-tech regulations.
"The employee could use this service to access the wages they earned but not yet been paid during the current pay cycle," Batten says. "So, this is not a loan. These are wages that have already, in fact, been earned."
The idea that earned wage access is not a loan is a view not everybody shares. Dana Wiggins at the Virginia Poverty Law Center says she's worried about people getting caught in a debt trap.
"The biggest problem that people had with payday loans back in the day was that everything was due all at once when you had to repay it," Wiggins explains. "It was seen as an advance on your payday."
The bill is advancing through the House of Delegates, where it was approved by a Republican controlled panel on a party-line vote. Senators will consider a similar bill on Monday.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.