Lawmakers in Richmond are considering a bill that would crack down on predatory probate lending.
Consider the scenario: A relative dies and leaves you a substantial amount of money in an inheritance. And then, before you can get the money, you receive an offer in the mail. Delegate Carrie Coyner is a Republican from Chesterfield who had that kind of mail show up in her mailbox.
"It says important probate documents. Do not bend. It looks very official," Coyner explains. "When you open it up and you’re someone who has lost a loved one, there is a check at the top; how easily you can get $20,000. No questions asked."
She says companies shouldn't be able to take advantage of people in grief by charging more than 400% interest. Matt Milam is with a company called Probate Advance, and he says the company that made Delegate Coyner an offer is an outlier, and that the advance is not really a loan.
"While I know that Delegate Coyner's heart is in the right place, there are significant unintended consequences of the House bill," Milam says. "Mischaracterizing these contracts as loans creates a number of problems for beneficiaries."
He says people coming into an inheritance should be able to get an advance on that money. Coyner says that advance is really a loan, and it should be subject to the same rules as every other loan in Virginia, including a cap on the interest rate. So far, members of the House and Senate have had no opposition to the bill, although the governor will have the final say.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
