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DC council votes against payday loans

Posted by Stephen on July 12, 2007

The Virginia Partnership to Encourage Responsible Lending (VaPERL), a coalition of organizations and individuals joined together to combat the ill effects of predatory lending in Virginia, applauds the DC Council vote Tuesday to limit Payday Loan interest rates to 24% within the district. The coalition also urges the council to sustain this vote when it comes back up in October.

The 12-0 vote by council with only one abstention is a first strong signal that the Payday Lending Industry will no longer have a special exemption on the 24% interest rate cap already in place within the District.

“This is the first of two votes necessary to make such a change permanent, but those of us who are members of VaPERL are encouraged that the council with do what is right and level the playing field with interest rates.” said Dana Wiggins, Responsible Lending Coordinator with VaPERL.

The district is joining Maryland, West Virginia, and 13 other states whose have capped interest rates or denied the payday and other predatory lenders a special exemption from usury laws.  A recent hearing of the DC council on June 22 brought out great numbers of advocates for the consumers and against the predatory industry. 

Consumer advocates in Virginia continue to fight for a 36% interest rate cap: “We see what tremendous harm Payday Lenders have done since 2002; we are proud of surrounding states and now the District of Columbia for taking this first step, and we hope that Virginia can also step up to the plate to cap interest rates in the Commonwealth to the same rates for other lending institutions,” said Jay Speer of the Virginia Poverty Law Center.

Recent actions by the DC Council show how effective public support of an issue can sustain it despite immense industry pressure.

“While we are grateful for the outcome yesterday, we still need to worry about the second vote coming up this fall.” said Jonas Monast from the Center for Responsible Lending. The second vote will not occur until October when council reconvenes from a summer recess.

The second vote to sustain the 24% interest rate cap is critical as a first stand against the industry. However, the reality is that council members, the mayor, and local religious leaders will be under intense pressure to change their minds by the industry lobbyists and their money in the time off. Consumer advocates will work together with community leaders because we want this first vote to be ratified in October.

“This first victory for DC means that all things are possible,” said Doug Smith with the Virginia Interfaith Center for Public Policy, a member of VaPERL.

“We hope that this action by the District, and actions by other states surrounding Virginia will have a positive affect, and help Virginia’s leaders to stand up for the citizens in a similar way by capping Interest rates at 36%,” states Smith.

For more information contact Jay Speer from the Virginia Poverty Law Center or Dana Wiggins, Responsible Lending Coordinator, VaPERL at 804-782-9430.

Views expressed by oped writers do not necessarily reflect those of mangement of Conservative Viewpoints.

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