Thursday, April 2, 2009

McAuliffe on Pay-day lending

Today gubernatorial candidate Terry McAuliffe offered the third part (of six) of his economic business plan for Virginia. In general, the plan offers McAuliffe's positions on health care, education, and retirement savings. But the very last thing McAuliffe offers is a plan to ban pay-day lenders in the state:
I will also establish a ban on pay-day lending that siphons off the hard-earned wages of too many working Virginians. I applaud the payday lending reforms passed in the 2008 and 2009 sessions by the General Assembly, and as Governor, I will continue this progress. As Governor, I will take the next step by banning all types of predatory lending, like open-end loans and car-title loans. (emphasis original)
I have not decided who I am going to vote for this primary (I have my leanings), but I do like that McAuliffe is offering business plans which positively affect the Southside and, like me, he wants to end the predatory practice of pay-day lenders.


Truth in Lending said...

Finally one of the candidates speaks to an issue that many many people are concerned about and gets it right. I am particularly happy that he called for a ban (a 36% cap on their interest would also be acceptable). I realize a ban may seem draconian but when something produces so much misery, has no real value and is very disruptive to our society, it must be banned. In addition, this so-called industry has a long history of deception and fraud. For example, the payday lenders repeatedly say publicly that this is a short-term loan and no one should pay attention to the APR (annual percentage rate). Not only is this contrary to the Truth in Lending Act but can you imagine what they must be telling borrowers in private if this is how they publicly try to deceive us? On top of that, the loan is designed to trap borrowers into a long-term loan and in fact for almost all borrowers, it is. Remember that he is also calling for a ban on high-cost open-end lending like car title lending and that is just as important as capping the payday lenders.

Drew said...

Thank you Truth, very informative.