Del. Mark Sickles, a Democrat, will run into opposition from some members of the General Assembly who want to essentially ban the storefront lending outlets from the state.
Whether Sickles or anyone else succeeds remains to be seen. Last year, talks collapsed in the legislature and neither side walked away with a victory.
But Sickles' Friday press conference attracted a crowd, making one thing clear: The debate is on again.
"My bill goes further than any reform bill does, because it ensures that nobody can borrow any more than they can afford to repay," he said.
He would also limit a borrower to having no more than two outstanding payday loans at one time. It would allow for a 60-day, interest-free payment plan on a second payday loan. The minimum term for the loan would go from seven to 14 days. And it requires a one-day waiting period between repaying one loan and taking out a new one.
Sickles said the approach represents "his current thinking" on the matter and he's open to changes.
Many lawmakers come to this issue because payday loan outlets are common in their districts, but that's not the case with Sickles.
"I have a pretty yuppie district," he said. "I've never knocked on a door and have people bring this up to me."
However, he watched last year from his seat on the House Commerce and Labor Committee as the two sides struggled to find common ground.
"I would like to end the cycle of debate on this bill, as well as the cycle of debt," he said.
A spokesman for Advance America said the industry is willing to work with lawmakers on changes. In fact, they are agreeable to loan limitations, an Internet database to track borrowing activity and cooling off periods between loans.
Spokesman Jamie Fulmer said it has been difficult to reach out to the other side.
"It's hard for us to negotiate in a mirror," he said.
But critics of the industry say the payday lenders succeed by trapping unwary consumers, including the working poor, into a cycle of debt, hence the "popularity" of the product.
Del. Glenn Oder, R-Newport News, wants to impose at 36 percent annual percentage rate cap on the loans, which he acknowledges would drive the industry out of the state.
"It's the only true protection," he said.
Sen. Donald McEachin, D-Richmond, has also filed a 36-percent rate cap bill, although he contends the industry could survive under it.
"I'm looking forward to a vigorous debate in the Senate on this," he said. "I think the 36-percent cap brings payday lenders in line with all other lenders in the state. That's the cap for anybody in Virginia. It allows the borrower to be on a level playing field."
By HUGH LESSIG
Source: Newport News, Va., Daily Press Date: January 11. 2008
