Capital News Service
February 2, 2010

Families are struggling more than ever to pay their bills during the current economic crisis. So payday lenders have sprouted up to serve people who want quick loans and checks cashed. But what do these lenders really cost people and society?

A lot, say legislators and advocates for lower-income Virginians.

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"The notion of predatory lending, the fact that we allow it to exist, speaks to our moral values. It speaks to who we are as Virginians," McEachin said. "This plague on our society, this plague on us as Virginians, needs to be eradicated."

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Critics call payday lenders modern-day loan sharks. They typically loan money until the customer's next paycheck - and used to charge almost 400 percent annual interest in Virginia. Two years ago, the General Assembly capped the interest rate at 36 percent. But some lawmakers say the lenders are evading the limit by offering different kinds of loans, such as car-title loans.

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After the press conference, Squires attended a discussion at the University of Richmond's downtown branch. It was sponsored by the Consumer Alliance of Virginia and the Virginia Partnership to Encourage Responsible Lending.

Dana Wiggins, the partnership's coordinator, said, "Communities do end up paying the cost for the predatory lenders that operate in their neighborhoods."

Wiggins said she hopes Oder's legislation and Squire's presentation "will educate people about the impact these types of establishments have on not only the people that take out these loans but also on those that live in the areas that surround these shops."

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