FOR IMMEDIATE RELEASE
January 5, 2010
VPLC Applauds SCC Regulation that Closes One Payday Lending Loophole
Payday and car title lenders still exploiting consumers using other means to avoid compliance with payday loan laws
Contact: Jay Speer
804-782-9430, Ext. 12
jay@vplc.org
Dana Wiggins
804-782-9430, Ext. 21
dana@vplc.org
RICHMOND - The Virginia Poverty Law Center (VPLC) applauds the State Corporation Commission's (SCC) recent issuance of regulations limiting licensed payday lenders use of car title loans to try and avoid the 2008 Payday Loan Act amendments.
While the SCC has done what it has the authority to do in closing this one loophole, payday lenders have proven expert at exploiting other loopholes as well as taking advantage of their borrowers' difficult financial circumstances. The SCC's regulations will only stop licensed payday lenders from pretending to do car title loans to avoid the payday loan laws. The following loopholes are still open and thousands of Virginians are now trapped in these "loophole loans":
- Licensed payday lenders can still make open-end loans with no restrictions if the loan is made at a location other than their payday loan licensed location;
- Unlicensed payday lenders (usually former payday lenders) can and will keep making open-end loans with no restrictions or regulations;
- Car title lenders can and will keep making open-end loans with no restrictions or regulations.
The SCC has done what is within its power and The Virginia Poverty Law Center urges the General Assembly to now do what is within its authority and close the rest of these loopholes and regulate car title lending in Virginia.