This editorial appeared in The Myrtle Beach Sun.
S.C. Rep Alan Clemmons, R-Myrtle Beach, showed grim determination recently in renewing his two-year fight to bring S.C. payday lenders under control. Earlier this month, he prefiled a bill for the legislative 2009 session that would limit customers of payday lenders to one loan at a time and cap the annual interest rate for such loans at 36 percent. Passage of his bill would protect our state's most vulnerable residents from the industry's predatory lending practices.
As Clemmons is well-aware, however, passage of his bill verbatim will be more difficult than shooting a hole in one on a five-par hole. Except for the facts that the economy is unraveling and traditional lending for folks with marginal credit has all but dried up, his new bill might have no chance at all.
Earlier this year, readers will recall, legislative leaders could not bestir themselves even to pass a Senate payday lending bill with provisions so mild you couldn't fairly deem it reform. That measure, which never got a hearing in the House, would have limited the customers of payday lenders from borrowing more than 25 percent of their income or $500, whichever is less, The 2008 Senate measure would also have barred customers from taking out new loans until their existing loans are paid off. As well, customers who pay off payday loans would have had to wait seven days before taking out a new payday loan. Most conspicuously, the Senate "reform" package would have allowed payday lenders to continue charging annualized interest rates of up to 300 percent. 300 percent.
Even though the Senate bill posed little threat to payday lending's fabulous profitability, industry lobbyists fought it into oblivion. When it reached the House Commerce Committee late in this year's session, Chairman Henry Cato, R-Greenville, refused to bring it up for discussion. Subsequent Senate attempts to force the House to revive the bill were unsuccessful.
To read the complete editorial, visit The Myrtle Beach Sun.