Payday loans are hot in South Carolina
Unlike neighbors North Carolina and Georgia, South Carolina is out to show that payday loans can work well for their economy. Legislation being introduced in Columbia will not cap rates at ridiculously low levels or otherwise ban the loans, but improve the consumer experience when it comes to using the loans. It will protect them from themselves, but not in a way that takes away the bath because they could conceivably drown in the bathwater.
The proposed bill would limit consumers to no more than one faxless payday loan at a time for a max of $600 dollars. Moreover, lenders would be required to check a statewide database before signing anyone up for a loan. In addition, a percentage of loan fees would go toward operating this database.
A payday loan database
Speaker Pro Tem Harry Cato, who previously blocked efforts by banks and credit unions to put a stranglehold on the payday advance loan industry, is a definite supporter of the financial freedom the industry grants consumers. Of this database, he approves, saying that it “creates a mechanism to track and make sure they don’t have more than one loan at a time” and that it “should help break a cycle of debt” for those who abuse the product.
Yet the industry is lukewarm to the notion of such a master control. “The notion of a database can be a little bit like big brother,” says Jamie Fulmer of Advance America Cash Centers Inc. However, “if that’s what the Legislature wants, we will certainly be supportive of that rather than a ban.”
Helping consumers, helping legitimate business
South Carolina House Speaker Bobby Harrell probably puts it best in the Times and Democrat story when he’s quoted, “The point is there is a niche this industry fills and lacking this industry, people would go down to the corner in bad neighborhoods and borrow money from people… at considerably higher cost.”
The more payday loans come under fire, the more opponents unintentionally draw attention to the value of the product.
Related video
- CBS “Short-Term Loans Can Mean Lasting Trouble” Refuted (personalmoneystore.com)
Good for South Carolina! It’s good to see at least one state that wants to see industries thrive, or at least be held to a standard rather than driving them out in totality.
Way to go South Carolina!
Payday loans have been a great resource particularly during emergency financial needs. I do believe that there should be some grounds set on how consumers use payday loans. I’m not saying that they should place strict restrictions on payday loans or what not. I’m simply stating the fact that there ‘are’ consumers who abuse this wonderful privilege. Payday loans are not the cause of cycle of debt; people are responsible for their own financial dealings. For their financial safety, I agree there should be a system put in place to track and make sure that consumers are not taking out 50 loans at once.