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Comment from David Miller
Time: January 10, 2008, 7:57 pm

That’s still being very “generous”. I’m glad that someone is actually considering it though.

Comment from finnegan
Time: January 11, 2008, 10:42 am

I’ve been asking around about this bill. I couldn’t tell if this was actually a bill to regulate/crack down on these lenders, or if it was another industry-backed bill like the one Terry Kilgore submitted last year.

Here’s what I’m hearing “from the grapevine” about it: Obenshain has had some conversations with at least one well-known consumer advocacy lawyer in town who either convinced or encouraged Obenshain to submit this bill. So this may actually be what it appears to be.

Comment from corysharpe
Time: January 11, 2008, 12:11 pm

“Hey David—why don’t you be “generous” and YOU offer these people a loan for less if you think you can. Put your money where your mouth is.”

Comment from JGFitzgerald
Time: January 11, 2008, 2:58 pm

Corysharpe,

Because DM opposed usurious car title lending, you feel he should offer the service himself. Under that argument, anyone who opposed drunken driving should open a bar.

Comment from Phil C.
Time: January 11, 2008, 3:42 pm

My opinion on title loans aside, I have to agree with JG’s assessment of Cory’s logic.

Comment from Phil C.
Time: January 11, 2008, 3:47 pm

I must say that I do like Obenshain’s plan, as it does allow for profit margin via interest, but puts a cap on it and makes the companies register with the SCC, which I think is a good thing (at least to track the companies).

David, you feel this is “generous”, what would you suggest?

Comment from Peter Westcombe
Time: January 11, 2008, 4:30 pm

It seems like the focus of this legislation is to run these businesses out on a rail, and not on providing better alternatives to the people who need the money bad enough to take out these loans. I think Cory has a point that if someone could come along and offer these type loans at a better rate, it would’ve been done by now.

Comment from David Miller
Time: January 11, 2008, 6:14 pm

Phil
I think that the federally capped APR of 36% is fair. Fair to the lenders.

Comment from Lowell Fulk
Time: January 11, 2008, 9:47 pm

Let’s see….

If Joe Sixpack has a car that is valued at $2,000.00, it qualifies him to borrow $1,000.00.

So if he takes advantage of this opportunity, at the end of the first month he will be required to pay back the $1,000.00, plus $200.00 in interest. If, as might be expected, (since he couldn’t come up with the money he thought he needed to begin with, and it would seem hard to come up with a spare $300.00 per week for repayment) he needs to roll it into the second month, it will cost him another $200.00 in interest to pay himself out of debt.

At three percent interest per month for the remaining ten months of the year specified, if Joe continues to not have enough money to pay off his loan, he will have accrued interest of another $300.00 bringing his total interest for borrowing $1,000.00 to $700.00. And this is if the interest is only applied to the original amount borrowed….

If however, which is not spelled out in this bill, the interest is applied to the total amount of the carryover, as is done with credit cards, then each time the loan is continued, the previous interest is included as principal, so therefore the next interest is figured on a greater amount…

So, by the time the end of the year rolls around, when his car has depreciated in value compared to the original valuation for purposes of the loan,… Joe now finds that his car is of less value that what he owes…

Who benefits from this dance????

Comment from Lowell Fulk
Time: January 11, 2008, 9:47 pm

I would submit,… The lendor…

Comment from Lowell Fulk
Time: January 11, 2008, 9:49 pm

Lender…. Sorry for the spelling blunder.

Comment from David Miller
Time: January 12, 2008, 5:23 pm

Peter
I disagree with a few of your points. First; as Lowell pointed out, these bills will not run “anyone out on a rail”. These bills are designed to appease us. That’s all. Unfortunately they are inadequate at appeasing anyone since they solve nothing. Second; Your assertion that “if someone could come along and offer these type loans at a better rate, it would’ve been done by now”. That’s not how capitalism works. If someone can get away with making this much money and charging this rate of interest then they are going to (have no illusion about it, it is interest because interest and fees are one and the same according to the IRS, The World Bank, The US Government and the Catholic Church, to name a few). Plain and simple.

Comment from robert
Time: January 16, 2008, 3:08 pm

Mr. Miller has a curious understanding of market conditions. I always thought that competition drove the price (interest) downward. Seems like a basic ecomonic theory to me.

Comment from Kyle
Time: January 16, 2008, 8:11 pm

Gee, imagine that, Virginia trying to regulate predatory practices. Something many other states have done a long time ago. Like everything else Virginian, 20 years behind.