Virginia House approves bill to allow car title lending to out-of-state drivers
A bill to allow car title lenders to extend credit to out-of-state drivers squeaked through the Virginia General Assembly Monday, overcoming objections from a bipartisan group of delegates who argued Virginia should respect the laws of neighboring states that have banned car title lending.
The measure overturns a new state regulation adopted in October that prohibited car title lenders from extending lending to owners of cars titled in other states.
The bill had emerged with little debate from the Democratic-led state senate last month, where it was sponsored by powerful Fairfax Majority Leader Sen. Richard L. Saslaw (D).
But it encountered stiffer resistance Monday in the GOP-led House of Delegates, where it was adopted on a narrow 51 to 47 vote only after delegates conducted a lengthy debate that reflected unusual political alliances.
Critics of the industry say it preys on those desperate for fast cash, extending short-term loans that carry extremely high interest rates to those least able to repay them. Borrowers who fall behind can lose their cars, often needed for employment.
The bill's supporters argued consumers are protected by new regulations adopted by the General Assembly last year. They also said that lawmakers did not anticipate that the State Corporation Commission would interpret those rules to bar lenders from making loans to out-of-state drivers that they are legally allowed to offer to Virginians.
And they contended borrowers know what they're getting into and shouldn't face further hurdles to getting cash from an intrusive government.
The bill adopted by the House differs slightly from the version approved earlier by the senate. The senate will almost certainly accept the House's tweak, which had been made at Saslaw's recommendation and then send the bill to Gov. Robert F. McDonnell for his signature or veto.
A spokesman for McDonnell said he is reviewing the issue.
Rosalind S. Helderman
| February 21, 2011; 5:41 PM ET
Categories: General Assembly 2011, House of Delegates, Robert F. McDonnell, Rosalind Helderman, State Senate
Save & Share: Previous: McDonnell urges lawmakers to add money for developmentally disabled
Next: McDonnell tapped as speaker for 2011 Shad Planking