Payday loan stores hit from both sides
In Harrisonburg, Va., today several picketers held up signs and passed out fliers in front of a payday loans store. Currently legislation is working its way through the Virginia legislature that would ban these lenders from using “open end loans.”
Virginia lenders that issue short-term loans started following open end loan regulations after the state put a cap on interest rates last year. Protesters are coming out in support of the new legislation, but do they really understand the whole story?
Hurting companies and consumers
The protesters are saying that payday loan and car title lenders are using “a loophole” by offering open end loans. However, these businesses are simply trying to keep their companies viable. The interest rate caps would eventually put these companies out of business, leaving the people who protesters and legislators are trying to protect with even fewer options.
Open end versus payday loans
People who take out open end laws actually stand to get a better deal than the would if they got payday loans. Generally when borrowers take out payday loans, they agree to pay it back within two weeks. If the loan isn’t paid back on time, interest begins to accrue. ... click here to read the rest of the article titled "Protesters Target Payday, Car Title Loans in Virginia"