Payday loans and 'significant' reform.

A bit of backstory on the debate over the payday lending industry now percolating before the legislature.

Sen. Ken Stolle, R-Virginia Beach, heads up a special subcommittee that should meet Monday to consider a bill that is aimed at borrowers who fine themselves trapped in debt after taking out several payday advances.

What constitutes significant reform in Stolle's eyes? A database that tracks borrowing activity and a limit of one outstanding loan at a time.

"We don't have to drop an atomic bomb to fix this problem," Stolle said. "With the database, we can surgically go in and pick out the people who need our help."

Del. Glenn Oder, R-Newport News, doesn't agree. He has sponsored a bill that not only limits borrowers to one outstanding loan at a time, but says they can't take out more than five per year. Without an annual cap on the number of loans, someone could take out 52 loans a year -- at least in theory, as Oder sees it.

So we could see a "reform" bill that the reformers absolutely hate. Stay tuned.

The House Commerce and Labor Committee meets on Thursday. It has already endorsed Oder's bill. It will consider a bill from Sen. Phil Puckett, D-Russell, that is considered more friendly to the industry. Members probably won't like it.

Then on Monday, the Senate Commerce and Labor Committee meets to consider Oder's bill. Members probably won't like it.

By the way, eight days remain in the session, not counting today.

Comments

[No Fax Payday Loans - David]

Some people can use no fax payday loans repeatedly and successfully, with no problems at all. While some are plunged further into debt because of payday loans. It’s only a matter of being responsible. It really depends on the consumers. For those of you who despise no fax payday loans, please don’t make an effort to deprive the option to people who do makes use of them. Leave no fax payday loans alone and let the people decide if they to use them or not. But there are controversial issues regarding that matter. I found some very informative articles here. http://personalmoneystore.com/moneyblog/ Let us learn all we can about this issue. Awareness is important in making decisions.

[grant]

If I want to take out 52 loans per year, I should have that right! I know a lady who collects yard gnomes, she has more gnomes then she has blades of grass, and she buys them compulsively. She has every right to do so, because she lives in the great country of the USA and that is what this great country is based on! Why is the government trying to tell us what to do with our money when they can't even balance their own checkbook? My debt is much smaller than that of the government, and my debt is getting smaller because I know how to use payday loans responsibly! Stay out of it. It has already been capped at the current rate, and it is successful. People use them, I use them, focus your efforts on areas that actually need help, like education, or maybe the war in Iraq!