This editorial appeared in The State (Columbia, S.C.).
Lawmakers have spent the past few years wrangling over payday lending as if the legalized loan sharks extracting tens of millions of dollars from South Carolinians are as important as this state's consumers.
They're not, and that's what should make adopting strict regulations a simple task. Yet, the House has passed a payday lender-friendly bill, and the Senate is considering legislation that's not much better. It's troublesome that legislators continue to prefer this predatory industry over their constituents.
Payday lending didn't grow into the behemoth it has become because of the free market; it was aided and abetted by the General Assembly. In 1998, lawmakers signed off on triple-digit interest rates and an unlimited number of loans at once, with no consumer protections.
Payday lenders have taken full advantage, laughing all the way to the bank at the expense of S.C. borrowers and their families. It's time lawmakers side with consumers. While they refuse the best solution – a ban – they should embrace strong regulations.
Unfortunately, things aren't headed that way. Early in the session, the House hurriedly passed a bill that would increase the maximum amount of a loan to $600 and limit borrowers to one loan at a time. The Senate is considering legislation that’s only slightly better. It would allow loans up to $500, up from the current $300, and require a two-day cooling-off period between consecutive loans. Neither bill would prevent lenders from making repeated loans that keep borrowers trapped in a cycle of debt; lenders would easily find a way around the Senate's proposed two-day cooling off period.
To read the complete editorial, visit The State.