Also: Muslim cleric prayer draws small protest | So far, lawmakers' pay immune from budget cuts

RICHMOND -- Car title lenders could continue to charge high interest rates, but would be limited in how much they could charge and how much they could lend borrowers under sweeping reforms that passed out of the General Assembly on Thursday.

The Senate voted 36-4 to agree with changes to the bill made in the House, sending the bill to Gov. Bob McDonnell. The governor can either sign the bill, make changes to it or veto it.

It would put a one-year limit on the loans, set up a maximum interest rate and require the lenders to be licensed.

Currently the lenders are unregulated, charge more than 300 percent annual interest and can repossess a borrower's vehicle if he falls behind on the payments.

Supporters said the reforms would protect borrowers from an endless cycle of debt while stopping short of running the lenders out of the state.

"I told the title lenders, if you don't want the front of your place looking like a used car lot, don't make loans to people who can't repay them," said Senate Majority Leader Richard Saslaw. "This also tells the people who are going to borrow that you need to understand that if you don't make these payments you will lose your car, but you won't be making payments forever."

Saslaw cited the example of a Harrisonburg man who took out a $1,500 car title loan, paid $380 per month for about a year, and after paying more than $4,700 he still owed the $1,500 principle.

In Saslaw's bill, lenders could charge between 15 percent to 22 percent per month, depending on the amount of the loan. The companies could not lend more than 50 percent of the vehicle's value, and borrowers must own the car.

It would require the loan be repaid in full within one year, and at least 8.25 percent of the principle must be paid each month. Saslaw said those provisions would put a stop to endless payments that never reduce the amount that is owed.

The House changed the bill to allow lenders to continue to charge interest on those who were in default for more than 60 days if they tried to hide the vehicle. It also would require the lender to pay for the cost of repossessing and storing a vehicle if it does not give borrowers a 10-day written notice that it planned to take the vehicle. If a notice was given, that cost would fall to the borrower.

Although the lenders aren't currently regulated in Virginia, industry representatives said there are about 130 car title lenders in the state.

The industry donated more than $190,000 to candidates over the past year.

Scott Johnson, an industry lobbyist, said car title lenders support the compromise. He said many of the changes codify the best practices of the industry.

"Although we are disappointed in the very high interest rate cap, we think this is a significant improvement," said Jay Speer, executive director of the Virginia Poverty Law Center.

If signed by McDonnell, the law would take effect Oct. 1.

-- The Associated Press

Muslim cleric prayer draws small protest

A daily ritual at the General Assembly became an occasion for protest today.

The Senate and House of Delegates open each day’s session with a prayer, usually given by a member of the clergy at a lawmaker’s invitation. Most of them are Christian, with an occasional appearance by a Jewish rabbi.

Today’s prayer in the House was given by Imam Johari Abdul-Malik, director of community outreach at the Dar Al-Hijrah Islamic Center in Falls Church, at the invitation of Del. Adam Ebbin, D-Arlington County.

The prayer was, in part, a call for inclusion. “Give us the strength to go beyond tolerance to understanding,” Abdul-Malik said.

About 10 of the 100 delegates, all Republicans, were not in their seats. While some declined to comment on their absence, some acknowledged later that they stayed away because of who was giving the prayer.

“Some of the activities that have been associated with his mosque I thought ought not to be recognized,” said Del. Lee Ware of Powhatan County.

Ebbin said of the absent delegates: “They missed a great prayer. I’m not going to judge my colleagues who chose not to participate.”

In a letter to his fellow lawmakers Wednesday, Ebbin said that Abdul-Malik “is well known for his opposition to terrorism of any kind” and that concerns about the imam’s appearance had been driven by “false rumors propagated on the Internet.”

Two of the Sept. 11, 2001, hijackers briefly worshiped at Abdul-Malik’s mosque before his tenure there.

A group of four protesters gathered outside the Capitol before the session, urging lawmakers to boycott the imam’s prayer.

James Lafferty, chairman of the Alexandria-based Virginia Anti-Shariah Task Force, said Abdul-Malik’s appearance at the Capitol was inappropriate “given the number of public statements he has made in support of convicted felons, people who have been involved in serious terrorist acts.”

Lafferty said he was unaware of any statements the imam has made condemning violence.

A “call to non-violence and anti-terrorism” is prominently featured on Abdul-Malik’s Web site.

-- Bill Sizemore, The (Norfolk) Virginian-Pilot


So far, lawmakers' pay immune from budget cuts

The governor and his senior staff took a pay cut. State employees are facing layoffs and furloughs. But there’s one group of people in Richmond whose salaries don’t appear to be in danger: state legislators.

While there’s been some informal discussion of reducing salaries for General Assembly members, several legislators said they don’t expect that to make it into the final budget, which could be approved as early as this weekend.

Currently, state senators earn $18,000 and House members earn $17,640. They receive additional money, called a per diem, for meals and lodging as well as money to cover their office expenses.

Neither chamber has had a pay increase in about two decades, so asking legislators to take a pay cut is a thorny issue. Anything other than a deep reduction would be more of a symbolic gesture than a substantial savings.

The 5 percent pay cut Gov. Bob McDonnell and his senior staff took in response to the ongoing economic downturn is expected to save roughly $135,000. For legislators, a $1,000 pay cut – about 5.5 percent of their salaries – would generate $140,000 annually. Both sums are minimal compared to the $4.2 billion shortfall in Virginia’s two-year budget.

Still, said Sen. Jeff McWaters, a Virginia Beach Republican, a pay cut would send “an important signal.”

“Americans are without jobs,” said McWaters, one of the wealthiest members of the legislature. “Their pay is being frozen and sometimes reduced. We should feel the exact same thing.”

Sen. Ralph Northam, D-Norfolk, has a different view.

The two months legislators spend in Richmond each winter keeps them away from their families and cuts into their earnings, he explained. “The salary and per diem is reasonable,” said Northam. “I don’t see any need to cut it further.”

Senate Majority Leader Richard Saslaw said he is willing to take a pay cut, but some legislators might not be able to afford one.

McDonnell has proposed up to 10 furlough days for state workers to save nearly $181 million. The Senate plan includes up to 6 unpaid days that would save about $108 million, while the House budget has none.

McDonnell also recommended that legislators forgo the $200 per day they receive for meetings attended when the General Assembly isn’t in session.

During the legislative session, the per diems are $135 in the House and $169 in the Senate to cover meal and lodging expenses. House officials have been critical of their Senate counterparts for not cutting their figure, so too has the fiscal conservative group Americans for Prosperity.

When compared to other states, Virginia lawmakers aren’t at the top or bottom of the legislative pay scale.

Compensation models differ, but judged on an annual basis, California ranks first, at $95,291, and Texas last, at $7,200, according to the National Conference of State Legislatures.

And compared to Virginia’s state workers, lawmakers rank near the bottom – the minimum salary on the state pay scale is $15,371.

“If these legislators worked on an hourly basis, they’d get paid a whole lot more. The governor, too,” said Sara R. Wilson of the Department of Human Resource Management. “People would be shocked at how little they get paid for how many hours they work.”

-- Julian Walker, The (Norfolk) Virginian-Pilot