by Robert Kittle
WCBD
February 16, 2010
Several state lawmakers say they’re hoping the legislature will pass a bill to close a loophole in the new payday lending law that took effect February 1.
They say some payday lenders are getting around the new law by giving up their payday lender licenses and getting new licenses as supervised lenders. That way they don’t have to comply with the new payday lending law, which limits borrowers to just one loan at a time and requires the loans to be registered in a database to make sure borrowers aren’t getting multiple loans. The law also requires a “cooling off” period between loans.
Sen. Vincent Sheheen, D-Kershaw Co., says, “Under this bill we will stop payday lenders from switching to supervised lenders and carrying on their same practices without being tracked by a database or having a cooling off period between loans.”
Sen. Joel Lourie, D-Richland Co., was a supporter last year of banning payday lending, as other states have done. “The ink wasn’t dry and there they were, scheming again, trying to figure out how to circumvent the law and how to stick it to the citizens of South Carolina.“
Sen. David Thomas, R-Greenville Co., says if closing the loophole doesn’t work, he’ll be ready to vote to ban the payday lending industry. “I look at the terrible consequences on individuals, on human lives, and you try and you try to work with an industry and you just have to ask yourself, is this simply a rogue industry?“
But payday lenders who have switched their licenses have told lawmakers they did it because they need to change their business model to stay in business. Last year, there were 4.3 million payday loans in the state. But with the new law limiting borrowers to one loan at a time, that number is expected to drop to 1.3 million this year.
Jamie Fulmer, with payday lender Advance America, says the company is not getting into supervised loans so the proposed bill wouldn’t affect his company. But he says of those companies that have switched, “If they choose to go through the licensing process and become licensed under an existing statute to offer another product or to reinvent their business, that’s certainly their prerogative.“
The bill has been passed by a Senate committee and supporters hope the full Senate will pass it this week or next. Then it would go to the House.
WCBD
February 16, 2010
Several state lawmakers say they’re hoping the legislature will pass a bill to close a loophole in the new payday lending law that took effect February 1.
They say some payday lenders are getting around the new law by giving up their payday lender licenses and getting new licenses as supervised lenders. That way they don’t have to comply with the new payday lending law, which limits borrowers to just one loan at a time and requires the loans to be registered in a database to make sure borrowers aren’t getting multiple loans. The law also requires a “cooling off” period between loans.
Sen. Vincent Sheheen, D-Kershaw Co., says, “Under this bill we will stop payday lenders from switching to supervised lenders and carrying on their same practices without being tracked by a database or having a cooling off period between loans.”
Sen. Joel Lourie, D-Richland Co., was a supporter last year of banning payday lending, as other states have done. “The ink wasn’t dry and there they were, scheming again, trying to figure out how to circumvent the law and how to stick it to the citizens of South Carolina.“
Sen. David Thomas, R-Greenville Co., says if closing the loophole doesn’t work, he’ll be ready to vote to ban the payday lending industry. “I look at the terrible consequences on individuals, on human lives, and you try and you try to work with an industry and you just have to ask yourself, is this simply a rogue industry?“
But payday lenders who have switched their licenses have told lawmakers they did it because they need to change their business model to stay in business. Last year, there were 4.3 million payday loans in the state. But with the new law limiting borrowers to one loan at a time, that number is expected to drop to 1.3 million this year.
Jamie Fulmer, with payday lender Advance America, says the company is not getting into supervised loans so the proposed bill wouldn’t affect his company. But he says of those companies that have switched, “If they choose to go through the licensing process and become licensed under an existing statute to offer another product or to reinvent their business, that’s certainly their prerogative.“
The bill has been passed by a Senate committee and supporters hope the full Senate will pass it this week or next. Then it would go to the House.
