Lawmakers are about to consider a significant change to legislation aimed at cracking down on predatory lending.
When lawmakers left Richmond last month, they could count among their accomplishments a bill that cracks down on predatory lending by capping all those 200% car-title loans and 800% internet loans at 36% interest. It was an effort that raised concerns among some Senate Democrats, who were worried about moving too fast too soon.
One of those was Senator Dave Marsden, a Democrat from Fairfax County
“We’re always wiping out one thing and bringing in another. But we still have to maintain access to this credit, and I think a reenactment clause slowing this train down a little bit," Marsden says. "Giving us time to react next year, giving these companies a time to transition.”
He didn’t get a reenactment clause, which would have required lawmakers to pass the same bill again next year. But he did get a delayed enactment clause, making the bill effective July 1st, 2021. Now Governor Ralph Northam is amending the bill to speed up the timeline, making the bill effective January 1st.
Jay Speer at the Virginia Poverty Law Center estimates that’ll save Virginians about $50 million in fees.
“It’s particularly important I think to move up the date now given what’s happened with this virus because so many Virginians are hurting financially," he explains. "What we need is a fair marketplace for them to get loans if they need to get loans and not a place where they can get gouged by predatory lenders.”
Now, lawmakers will have an up or down vote on that amendment when they return for what’s known as the reconvene session on Wednesday.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
