Attorney-general candidate Steve Shannon today released a new plan to protect consumers against exorbitant loan rates. The plan calls for tightening restrictions on the rates charged by payday lenders, increasing penalties for lenders who break the law, and providing financial literacy education for consumers.
“It is the attorney general’s responsibility to protect Virginians,” said Shannon. “When I’m attorney general, I will crack down on those who prey on the most vulnerable consumers in our society.”
Shannon’s plan calls for Virginia to strengthen restrictions on payday loans to meet the maximum interest rate recommendation of the Federal Deposit Insurance Corporation. It calls for doubling the maximum fine for each violation of the Commonwealth’s payday lending laws, and promises more vigorous enforcement of those laws by the attorney general’s office.
Shannon has also proposed that the fines paid by violators of payday lending laws be directed to fund financial literacy courses for consumers.
Despite the Virginia General Assembly’s passage of payday lending reforms in 2008, payday loans still come with annualized interest rates of over 300% percent. Payday lenders have also found ways to work around the new restrictions, for instance issuing “open-end” loans, which have no limits on the interest rate a lender can charge.
Read Shannon’s full plan: http://shannon2009.com/paydaylending.
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