Weekly update of my legislative agenda issue.
OK, it’s been a busy day and week so updating this legislative agenda issue got a little behind, though I did mention this earlier in the week. Thursday, the General Assembly passed legislation that will make some changes in payday lending. HB12 as amended includes:
- A change in the fee. Currently lenders can charge $15 per $100, with a loan limit of $500. The new fee will be 20% of the loan amount plus a $5 filing fee and plus interest at 36%.
- Borrowers are allowed one extended payment term loan per year. The term is 4 payments over at least 60 days, with no additional interest charged.
- There is a 90-day waiting period after the borrower pays off an extended payment loan before another loan can be made.
- Borrowers are allowed 5 loans in a 180-day time frame but only one loan at a time.
- A database will be established to track loans.
- The minimum term of the loan has been changed from 7 days to two times the borrower’s pay cycle.
There is one little interesting item in the bill that I haven’t heard anyone mention:
§ 6.1-469.1. Application of chapter to Internet loans.
The provisions of this chapter, including specifically the licensure requirements of § 6.1-445, shall apply to persons making payday loans over the Internet to Virginia residents, whether or not the person making the loan maintains a physical presence in the Commonwealth.
So, for the first time, out-of-state payday lenders will be licensed in and regulated by Virginia. That is a significant change and one that I suspect may be a bit difficult to enforce. Nevertheless, it makes sense. To do otherwise would be to allow those lenders not only to circumvent the rules here but would put those who are either based in Virginia or have a Virginia nexus at a disadvantage.
So while this bill isn’t perfect (and didn’t got as far as I would have liked), I’m glad that we have had some reform in this area.
VIVIAN J. PAIGE | All Politics is Local 
You forgot that the term of the loan will be twice the person’s pay period
I’ve added it in.
I think that making these changes in the payday lending industry is NOT fair to the responsible people who use the stores wisely. It’s really violating a persons constitutional rights!
If people were more responsible then there would NOT be a problem with the stores and they would be left alone.
Irresponsible people go into these stores (by the way, they ARE NOT forced to go into the stores) and take out loans and they know they can’t pay them back from the start and then they blame the stores. Now, the blame needs to be put where it belongs!
I think that these bills should be killed and the stores should be left alone the way that they are.
when will politicians stop governing free right of choice. what ever happened to people taking responsibilty for their own actions. this introduced law is not controling the problem but will only place it back into the streets. at least we are aware that they are legitimate businesses and we all have a choice. Secondly if you take a loan remember you entered into a legal binding contract which means…pay it and stop whining. you knew the terms up front and know one else gave you the money they did and now you want to cut them down because you claiming abuse. how absurd!