The last chance for pay day lending reform in the House died Tuesday afternoon when HB2563 was stricken. With the McClellan amendment, interest rates were capped at 72%, double that allowed for other consumer loans.
“You can’t make your payroll on that kind of return,” [bill patron Del. Lee] Ware said.
OK, so they don’t make payroll and the industry dies. Seems like a reasonable response to predatory lending. The federal government seems OK with that, since they mandated a maximum of 36% on loans to active duty military and their families.
What is obvious to me is that the pay day lending industry will go to whatever lengths necessary to protect their obscene profits. The amount of money they have spent on advertising (ads in the Virginian-Pilot almost daily) as well as the money they spread around to legislators is probably a drop in the bucket compared to what they make. 380% interest is just unconscionable.