I was about to respond to a post about the Governor’s plan to provide loans of up to $500 to state employees and then decided my response would be too long. Let me start with a link to the Governor’s news release about the program. Now, a few quotes from it:
The pilot program, a partnership between the Commonwealth of Virginia Campaign (CVC) and Virginia Credit Union (VACU), will offer small loans-$100 to $500-to state employees facing financial difficulties.
OK, so just who is the CVC?
The Commonwealth of Virginia Campaign (CVC) facilitates state employee giving in Virginia.
And this (emphasis mine):
Loans will be backed by the Virginia State Employee Assistance Fund (VSEAF), a 501(c)3 charity administered by the CVC team within the Department of Human Resource Management. Both CVC and VSEAF programs are run by state employees for state employees, and are funded solely from employee contributions, with no state tax dollars involved.
So the money is coming from the employees and will be loaned to employees. Where’s the problem with that? For those who are not familiar, the term for this is micro lending and it has been used successfully across the globe. Here is one source.
As for complaints about the stated interest rate of 24.99%: would you rather the employee go to a payday lender and pay a much higher rate? Remember, there has been an effort underway to put a cap of 36% on payday loans for the last several years but the caps have been resisted.
But hey, don’t let the facts get in the way when you can rely on misrepresentations of the MSM.
State employees interested in the program can check out the website here.
VIVIAN J. PAIGE | All Politics is Local 
“Microloans” are generally seed money to start micro-businesses — like buying a sewing machine to become a tailor — not to pay the late credit card bill.
Not necessarily, Mouse. That may have been the original use but it has expanded beyond that.
since no tax money is used in the program I don’t have a real problem with it but I do understand J.R.’s point on Bearing Drift that if many state employees are strapped for $100 then there is likely a larger problem afoot.
Except that point makes little sense in light of the economic crisis that the state – and everyone else – has suffered. The payday lenders often tout that their services are not just for the working poor. How is this different?
I’m sorry, Vivian, but I just don’t understand what you’re trying to say here. Could you reiterate?
If the larger issue referenced is that state employees’ wages are not keeping up with a standard of living or inflation, then I really fail to see the point. In this case, this is private action to ameliorate that issue (if that is indeed the issue that is cause for concern). And wouldn’t that be what Republicans’ solution would be?