SB 1548 comes out of a study of the Consumer Finance Act by the Bureau of Financial Institutions.  The study was in response to legislation to allow internet lending under the Virginia Consumer Finance Act.

The Virginia Financial Services Association (an association of Virginia consumer finance companies), the Attorney General’s Office and VPLC have agreed on changes to the Consumer Finance Act that will:

• Increase fees for consumer finance companies that engage in responsible lending
• Prevent payday and car title lenders from making consumer finance loans from the same location
• Prevent lenders from engaging in back-to-back loans that trap borrowers into a cycle of debt
• Put a 36% APR cap on all loans made under the Act regardless of the amount of the loan

These changes to the Act will prevent internet lenders from exploiting Virginians with loans of 300 to 700% interest that have none of the restrictions of payday and car title lending.  If we open Virginia to internet lending with no restrictions, we will put Virginia’s consumer finance companies out of business.  Instead, let’s make Internet lenders compete on a level playing field with our existing consumer finance companies.