MEDIA ADVISORY: Broad Coalition Calls for Passage of Popular Virginia Fairness in Lending Act in 2020
Monday, January 6th, 2020
FOR IMMEDIATE RELEASE:
Monday January 6, 2020
Monica Lauw, Communications Manager, Virginia Poverty Law Center
Broad Coalition Supports the Virginia Fairness in Lending Act
Statewide leaders call on Virginia General Assembly to act in 2020 after predatory lending bills have languished for years
Richmond, Va., – The Virginia Fairness in Lending Act is a new bill that would overhaul Virginia’s payday and title lending laws, which have among the weakest consumer protections in the nation. The comprehensive legislative effort being led by Delegate Lamont Bagby, chair of the Virginia Legislative Black Caucus, and Senator Mamie Locke, chair of the Senate Democratic Caucus, would enact popular reforms that curb predatory lending practices while ensuring Virginia consumers have access to affordable credit on fair terms. The legislation would save working families in Virginia more than $100 million each year.
Virginia has come to be known as the predatory lending capital of the east coast because neighboring states have acted to protect consumers but Virginia has not. Hundreds of thousands of Virginia residents are being trapped in debt and charged more than 200 percent interest by out-of-state companies. The same lenders charge far less in other states.
The Virginia Fairness in Lending Act requires that all loans have affordable payments, enough time to repay, and prices that are three times lower than they are in Virginia today. The bill is modeled on reforms proven to maintain widespread access to credit, similar to legislation passed in Ohio and Colorado. Those laws resulted in large savings to consumers that were put back to work in local communities and businesses, instead of being drained from the economy.
The comprehensive bill is supported by the Virginia Partnership to Encourage Responsible Lending (VaPERL), a statewide coalition including business, veterans, faith, community, and local government leaders, working together to end predatory lending practices in the commonwealth while expanding access to affordable loans.
The Virginia Partnership to Encourage Responsible Lending supports the Virginia Fairness in Lending Act which will result in:
– Rates that are fair for borrowers and viable for lenders
– Affordable installment payments
– Reasonable time to repay
– Access to safe credit
– Preventing loopholes and unlicensed lending
Jay Speer, Executive Director of the Virginia Poverty Law Center, explained: “Payday and title lenders have been taking advantage of working families in Virginia for too long. The General Assembly can immediately put more than $100 million annually back into the pockets of working people statewide. Virginians agree that it’s time to fix predatory lending and usher in fair, lower-cost loans.”
Kim Bobo, Executive Director of the Virginia Interfaith Center for Public Policy, said, “The Bible condemns money lending that exploits the poor. Virginia’s unchecked usury is harming low-income families in our faith communities and congregations. We call upon our lawmakers to ‘hear the cries of the poor’ and end abusive lending practices in Virginia. Sensible policies grounded in our common values can end the debt trap and result in the fair lending that other states have achieved.”
Del McWhorter, Chairperson of the Virginia Organizing State Governing Board, said, “Virginians from all walks of life want to see the debt trap business model of predatory lenders reined in. It’s time for the legislature to stand with the people and get this right once and for all.”
The proposed reforms have broad support among Virginia voters among all demographics and among Democrats, Republicans, and independents according to a recent poll from the Wason Center for Public Policy at Christopher Newport University. The representative poll of 901 registered Virginia voters from Nov. 11-22 found widespread agreement that predatory lending reform is popular. Among the key findings:
- 75 percent of Virginia voters believe that payday and title loans should be more regulated.
- 84 percent support capping annual interest rates at lower levels than are in today’s laws.
- The poll’s findings are consistent with national polling that has found support for reform among all demographics and among Democrats, Republicans, and independents.
- Only 2 percent of Virginia voters had a positive view of payday lenders, and just 4 percent had a positive view of title lenders.
The survey questions on payday and title lending were commissioned by The Pew Charitable Trusts as part of its research into Virginia’s payday and title lending marketplace.
The poll results and methodology are available at: https://cnu.edu/wasoncenter/surveys/2019-12-16/
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