Wednesday, January 10, 2007
Editorial: Pass the loan-shark repellent
Del. Kilgore needs to reconsider a bill that would allow car title lenders to prey upon Virginians.
From the RoundTable blog
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Lawmakers might actually spray loan-shark repellent on predatory payday lenders, but Del. Terry Kilgore's bill favoring car title lenders won't make the water any safer for hard-pressed Virginians in need of loans.
Kilgore proposes licensing car title lenders, which is a good thing, but he would then allow them to impose whatever interest rate and fees that they wish in the form of revolving loan accounts.
Kilgore hasn't forgotten entirely about borrower protection. He wants a statement that starts out cautioning, "The interest rate on this loan is high. You should consider whether there are other lower cost loans available to you."
It includes a smattering of legalese about pledging a car as collateral, something about repossession and the assurance that if that were to happen the borrower would get any surplus money from the sale. As if.
Kilgore wants to make this passage prominent, in bold-faced 10-point type, above the signature line. Wow, a whopping 10 points. That's a tad bit bigger than the 9.5-point type you're reading right now. Not exactly an attention-grabber.
Maybe it should be printed in about 30 points (the size of the headline above) and say something like this:
Warning: the law requires that we issue the following disclosure. While you're reading it, ask yourself: Do I really need this money?
You might find better terms from the loan shark on the street corner. If you default on his loan, he'll break your legs. Big deal, they'll heal in a few months.
Default on our loan, and we'll take your car. It could take you years to recover. You could lose your job, and we'll make sure this shows up on your permanent record. Think any legitimate lender will ever in the future spot you a loan when you really need it? Won't happen.
You still have time to reconsider, before you sign and for 24 hours afterward if you return all our money. After that, you're on your own, because the commonwealth of Virginia isn't going to protect you.
Nope, Del. Kilgore is making sure that Virginia protects us, the small businessman. We're the ones with the smarts and the flexibility to capitalize on others' hard times and misfortunes.
It's all about free enterprise. Kilgore's making sure we're free to enterprise. At your expense.
Still want the money?
