Honestly, We Don’t Care About Your Credit

February 19, 2007 | | Comments Off on Honestly, We Don’t Care About Your Credit

It’s been difficult to write this quick blog post about payday loans in Virginia. Every time I perform a simple web search, I’m bombarded with hundreds of links offering me quick, free, money. They “don’t care about my credit.” Luckily, I do.

On Friday, the Virginia House of Delegates passed a series of reforms targeting payday lenders. It’s now been passed by both the Virginia House and Senate, and it’s up to Gov. Kaine to stamp his approval. However, there’s a large contingency of advocates who don’t think that the reforms go far enough to protect consumers. They would like to see Gov. Kaine do more to make sure the compounding interest doesn’t send more Virginians into a never-ending abyss of debt.

According to a panel at UVA’s law school in November of last year:

“The payday loan industry in Virginia has grown from a $165 million business in 2002 to more than $1 billion worth of transactions in 2005.”

Supporters of the loan industry contend that they are providing a much-needed service to the community. They claim that there’s no way you’re going to go to your employer to float you some cash in advance if you’re running low on dough. This is 2007, they say. It’s just not a wise career move. Furthermore, loan industry officials claim they’re not targeting poor communities– they’re just setting up shop in places that are profitable.

According to Del. Ken Melvin, representing Portsmouth:

“You’ve seen the [advertisement] with the perky blonde who says that she needs emergency money for a car repair? Looks like she’s from the Junior League? The likes of her would not get caught dead in one of these joints on the other side of town. And that’s where they are. They’re next to poor people, poor neighborhoods.”

(Yes, Del. Melvin. I have seen the ad about twenty times, and it’s unfortunately not on YouTube yet to share with everybody. If any of our readers find a link, hook us up. Or if you have it on TiVo, post it up! In the mean time, I give you Charlie Falk Auto. They don’t care about your credit.)

President Bush saw that payday loans were hurting military personnel in the pocketbook, and signed the 2007 National Defense Authorization Act, which provides a 36% cap on annual interest rates amongst other safeguards to protect our soldiers’ wallets (check out the link to the article. All the ads are for loans!). This Act protects military personnel who had been getting hit as hard as 400% annual interest. The Act was signed as part of the John Warner National Defense Authorization Act for Fiscal Year 2007, after Virginia’s own Sen. John Warner.

So, if these predatory lending practices are too dangerous for those in the Armed Forces, what about the rest of America?

Update (2/20)

Consumerist, a great blog about consumer rights, is covering this too. In response to Del. Del. Onzlee Ware (D-Roanoke), a supporter of the bill, who said payday loans give poor residents a choice instead of having to rely on charities and churches when they need cash, editor Ben Popken of Consumerist said:

Just like when you swallow poison you can either get your stomach pumped, or you could take an axe and chop it out.

Tip 3 use a personal tonethe best sales pages and sales letters appeal to the http://college-homework-help.org target market on a personal level.


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