Senate Chair Criticizes Absence of Payday Loan Agency Head
A Senate subcommittee chair today criticized the absence of the chief of the agency that oversees payday loans from attending meetings considering limits on the two-week, high-interest loans.
S.C. Sen. John Hawkins (pictured), R-Spartanburg, chair of the Senate Judiciary subcommittee that considers criminal law, extended “a most cordial invitation” to Dean Bratton, the commissioner of the S.C. State Board of Financial Institutions in charge of consumer finance, to attend the next meeting 9 a.m. March 29.
Bratton sent a lower-ranking staffer to today’s meeting, and the staffer said he is no longer involved with fast payday advance lending regulation.
“Why hasn’t Mr. Bratton been here at all these meetings?,” asked Hawkins, the subcommittee’s chair. “He shouldn’t be sending someone not prepared to help us with this issue.”
Bratton said he had a previous commitment that prevented him from attending today’s meeting, and he said he plans to attend next week’s meeting. He said he attended the committee’s first meeting March 1.
“It’s not that we’re not interested; we’re very much so,” Bratton said.
The panel is considering a bill introduced by Sen. Robert Ford, D-Charleston, that would make bad credit payday loan lending a crime. Hawkins has said he wasn’t likely to support a ban, but he was concerned about practices that can trap borrowers in a cycle of debt with multiple loans. Current law now allows lenders to make loans for as much as $600 at a time, charging $90 in finance charges, the equivalent of a 390 percent annual percentage rate on a two-week loan.
Hawkins proposed provisions Thursday modeled after a Florida law. It would require lenders to:
- Make no more than one $600 loan at a time to a customer
- Wait at least 24 hours before making another personal cash loan to that customer
- Consider the ability of borrowers to repay and enter each transaction in a database that would be monitored by state regulators to ensure the law was being followed.
Rep. Alan Clemmons, R-Horry, has introduced a bill in the House to limit cash advances. It is awaiting a second hearing.