General Assembly approves restrictions on Payday Lenders

March 7, 2008

From the first day that Payday Lenders setup shop in the Greater Wards Corner Partnership area, the members of the Greater Wards Corner Partnership have worked to remove this predatory scourge from our neighborhood. No one has worked harder in the Partnership than Elyse Kalfus, President of the Greater Wards Corner Business Association, to bring to the attention of our elected representatives in Richmond the atrocities that Payday Lenders perpetrate on the financial health of our community.

Pilot Online reports that the General Assembly today approved restrictions on payday lending that include an interest rate ceiling and limits on the number of loans to individuals.

After years of negotiations, the legislation was approved and is being sent to Gov. Timothy M. Kaine.

The compromise limits borrowers to one loan at a time and no more than five short term loans in 180 days. At the end of that period, a person who has trouble making payments can ask for a 60-day extended payment period.

Once someone who has trouble paying the loans completes their payments, they are not allowed to get another payday loan for 90 days.

If someone borrows five different times over 180 days and has no trouble making payments, that person has to wait 60 days for a new loan.

The bill sets a 36 percent cap on interest charges. It also creates a database to track loans and borrowers. The database would start next year.


General Assembly Update: Payday Loans

January 15, 2008

The Virginia Payday Loan Act was first adopted by the Virginia General Assembly in 2002 and exempted the industry from the prior 36-percent interest rate cap. Virginia caps the interest rate on a one-week loan at 780 percent and 390 percent for two-week loans. As bad as the interest rate may be, the worst part is the debt trap that the borrower gets caught in. Payday loans are designed to trap the borrower into repeat loans.¹

There are currently a number of bills filed in the General Assembly attempting to “fix” the Payday Loan issues in Virginia. I have attempted to summarize them, provide links to them, and let you know where those bills are in their journey through the General Assembly.

HB12, HB249, HB1377, HB1404, SB24, SB279, SB238, and SB670 all propose limiting the annual interest rate for Payday Loans at 36%.

HB12, HB249, HB1377, HB1404: In House Commerce and Labor Committee
SB24, SB279, SB238, SB670: In Senate Commerce and Labor Committee

SB25, SB156, SB278, and HB730 propose repealing the Payday Loan Act entirely with effective dates of July 1, 2008, July 1, 2010, January 1, 2009, and July 1, 2010 respectively.

SB25, SB156, SB27: In Senate Commerce and Labor Committee
HB730: In House Commerce and Labor Committee

HB176 Requires the creation of an internet accessible statewide database of payday loans.   Lenders would be required to query the database to determine whether the borrower is eligible for the loan. The database would be paid for by a 50 cent fee added to each payday loan. HB1103, HB1352, and SB588 would create the same database as above as well as an Extended Payment Plan; they would change the minimum term of a payday loan from seven to 14 days; require a one day waiting period between the repayment of a loan and making a new loan; and other tweaks.

HB176, HB1103, HB1352: In House Commerce and Labor Committee
SB588: In Senate Commerce and Labor Committee

HB189 gives localities the power to regulate the interest rate and number of payday loans allowed within their jurisdiction.

HB189: In House Commerce and Labor Committee

Thanks to Waldo Jaquith for creating Richmond Sunlight, an invaluable tool in tracking these bills and the Virginia General Assembly.

November Civic Connection Updates

November 30, 2007

Updates related to the Wards Corner Partnership area, taken from November’s Civic Connection:

• PROJECT FOCUS. The Civic Connection says “A Youth Academy for residents of the Denby Park neighborhood began on November 19, 2007, the Crossroads Recreation Center, and will run for four weeks.” This is untrue. The Denby Park Youth Academy has been postponed indefinitely for lack of interest in the program.

• TRUCK RESTRICTIONS. The Norfolk Police Department began enforcement of a new city ordinance passed by the Norfolk City Council in October 2007 limiting truck traffic on Hampton Blvd., Granby St., and Church St. Enforcement of this ordinance prohibiting trucks of 4 axles or more from 4:00 P.M. to 6:00 A.M. Violation of this ordinance may result in a fine of $250.00. Members of the Norfolk Police Department have received training in preparation of enforcement of the new code from the staff of the City Attorney’s Office. Officers will be assigned to enforcement of this new ordinance in the initial week and there after as deemed necessary. Motorists can expect officers to strictly enforce any violation of this ordinance.

• CITY COUNCIL. Approved a resolution supporting passage by the General Assembly of legislation to prevent exploitative payday lending practices in Virginia.

• TRAFFIC SIGNAL BATTERY BACK-UPS. The Division of Transportation have installed and tested battery back-up systems at two intersections in Norfolk — Virginia Beach Boulevard and Military Highway, and Brambleton Avenue and St. Paul’s Boulevard – and plans to install the back-up system at other key locations. The new system will keep traffic signals operational during power failures and during periods of power fluctuation. Ideally, the traffic signal will continue its regular cycle, although it may – for a variety of reasons, enter a flashing red/ flashing yellow cycle. The back-up system ensures the safe operation of signals for a minimum of 4 hours. The next location planned to be equipped with battery back-ups is:
Hampton Boulevard and Terminal Boulevard

• SCHOOL FLASHING BEACONS. In an effort to ensure safe crossing at school zones, DOT has upgraded school flashing lights at Granby High School. The new flashing lights horizontal instead of vertical in order to increase the surface area visible to drivers, Light Emitting Diodes (LED) are now being used because they are brighter when they flash, and the background of the school flashing beacons are now florescent yellow-green which makes it apparent to drivers that they are crossing a school zone.

• ARTS COMMISSION. The Norfolk Commission on the Arts and Humanities is pleased to announce the December performances in its free, open to the public, Arts Within Reach series. Dec. 4 (Tues.) 7 pm Arts Within Reach. Virginia Symphony Holiday Brass Quintet. Members of the symphony’s brass section—Stephen Carlson, trumpet; David Vonderheide, trumpet; Wilford Holcombe, horn; Timothy Owner, trombone; Peter DuBeau, tuba; John Lindberg, percussion—ring in the holidays with a unique, seasonal concert. Norfolk Fitness and Wellness Center, 7300 Newport Avenue. 664-4321

Whistle Blowers Suing Payday Loan Lenders

October 28, 2007

If you don’t think that Payday Lenders are like the mafia, you will after you read this article that was published in the Daily Press.

Click to read the Daily Press Article

The Greater Wards Corner Partnership has been at the forefront of the battle to rid Virginia of predatory lenders. Many thanks go to Elyse Kalfus for her tireless efforts in keeping us informed.

Payday Lending: Letter from a store manager

October 9, 2007

Virginia Partnership to Encourage Responsible LendingThe following is a letter from William Harrod, a former payday lending store manager, to all Virginia legislators.


My name is William Harrod and until last month I was a payday lending store manager with Check ‘n Go, the nations second largest payday lender. I have worked in stores in Gloucester, VA, Northern VA, and Washington DC. I know that the Virginia legislature will likely consider laws relating to payday lending in your upcoming session and I wanted to provide you some information based upon my experiences as a payday lender for nearly a year. Please understand that the information I convey in this email is drawn from my experiences working in the commonwealth of Virginia, throughout my training experience.

Much of the information I need to convey is already widely publicized. I also understand that the industry comes to your hallowed halls with lies, fabrications, unethical tactics and a great deal of money to throw around. While I understand all lobbyists attempt to convey information to lawmakers in the most favorable way for their client, the payday lenders actually lie. Theirs is an attempt to perpetrate a fraud on your lawmaking body, and continue to operate outside of usury laws.

Click here to continue reading this article

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