Vehicle title loans are particularly dangerous in Virginia. We have the dubious distinction of having one of the highest car repossession rates on title loans in the country, because our laws have unusually weak consumer protections. As a result, thousands of people lose their transportation to work due to unaffordable loans that earn an average of 217% interest. It is wear and tear, plain and simple.
Lawmakers in our states have attempted reforms over the years, but lenders have succeeded in blocking or bending the rules. In 2008, certain limits on payday loans were exceeded. But lenders quickly switched to offering “open-ended credit,” like a credit card but with 300% interest, tapping into another part of Virginia’s legal code where they are not required to license and can charge unlimited rates. Virginia is one of six states with so weak loan laws that payday lenders operate that way.
According to the Virginia Public Access Project, payday lenders and securities lenders paid more than $ 950,000 to candidates and campaign committees in 2018 and 2019. But it was heartening to see that some of our locally elected officials, including the Republican Senator David Suetterlien of Cave Spring, and Del. Sam Rasoul, Democrat of Roanoke, did not accept campaign contributions from this industry and acknowledged the harm predatory loans are doing to our communities. It shows that this issue is not urban or rural, Republican or Democratic.