Staunton City Councilman Bruce Elder, who inspired a grassroots statewide initiative that brought the issue of payday and car title lending to lawmakers’ attention in 2007, is leading the fight against predatory lending practices once again. He initially sought the 36 percent cap in 2008 and, though it was not passed, has been a relentless advocate since. Since the Staunton City Council passed a resolution supporting the 36 percent cap in June, 65 cities, towns, and counties have followed suit. The movement has gained support from the Virginia Municipal League, the Virginia Association of Counties, the Virginia Interfaith Center for Public Policy and AARP Virginia. Dana Wiggins of the Virginia Poverty Law Center says the high-interest loans are designed to trap borrowers in a cycle of debt, adding, “If the interest charged was less, it would be easier for people to pay back the loans and I wouldn’t have to run a hotline for people who have lost homes or gone into bankruptcy because of these loans.” Legislation passed in 2008 did help reduce the damage caused by payday and car title loans by preventing borrowers from having more than one loan at a time, creating new repayment stipulations, and lowering maximum annual percent rates on loans to 391 percent. Still, Elder says he hopes the upcoming legislative session will bring “true reform,” which the general assembly failed to accomplish in 2008. He says, “When we achieve a 36 percent cap, we’ll have won the battle here.”

Three years after theVirginia General Assembly issued mandates restricting short-term, high-interest loans, new bills to further regulate the industry are proposed for the upcoming legislative session. Bills prefiled by Sen. Mamie Lockeand Del. Glenn Oder seek to cap at 36 percent the annual interest rate that payday, car title and open-end line of credit lenders can charge.