Payday Loan Times

Rev. Marcellus Harris, president of the Coalition for Justice, says the group will be in Richmond later today to protest instant payday loan and car title lending.

Harris and five others held a midday protest in front of the Cash-N-A-Flash lender on West Mercury Boulevard yesterday afternoon.

“It’s a quick fix at first,” Harris said. “And then the issue changes and the quick fix become a big problem when people try to pay back these high interest rate loans.”

Lawmakers are expected to debate the future of car title lending, a controversial business that critics say hurts the poor, in the upcoming General Assembly session. The rates involved make it similar to the cash loan online industry.

In exchange for a borrower’s car title, lenders will offer high-fee, high-interest loans. If a borrower fails to pay the money back the lender can take the car and sell it to pay off the debt.

Car title lenders are currently not regulated in Virginia, but state delegates have filed at least two separate bills that could change that. One bill would require lenders to get a state license to operate. A second would cap the annual interest rate at 36 percent - just like that on military payday loans.

Lawmakers originally regulated payday advance loan lenders in 2002, but they are expected to debate tighter restrictions on the industry in the coming session.