A House Subcommittee last week approved a pay day lending bill that would bar consumers from taking out more than one loan at a time. The measure would create a database that instantly reports loans, and pay day operators would have to check it before granting a loan.
Under the plan, loans can be made up to $600 and a fee of $15 for every $100 borrowed is allowed. That fee amounts to an annual percentage rate of 391—which opponents of the bill say is too high. Prime co-sponsor of the bill, Greenville County Republican Harry Cato, disagreed, “The current bill before us is silent on any type of cap in interest rates because we consider it to be a fee and shouldn’t be calculated as an A.P.R., so I’m anticipating that the bill will continue to remain silent.”
Calhoun County Democrat Harry Ott would like to see the fee reduced from $15 TO $10. Other Democrats would like to see a more drastic drop to a 36 percent rate of return.
According to pay day loan industry representative Carol Stewart, “We’re not talking about a 36 percent rate of return here; we’re talking about a 36 percent annual percentage rate on a two-week loan. What that means is that instead of a $15 per hundred fee, we’re going to loan $100 for $1.14. That’s ten cents a day per hundred that you would keep out.”
Stewart says a 36 percent A.P.R. cap would be a back door way of closing down the industry in South Carolina. The bill is scheduled for full committee debate this week.
On the Senate side:
State Superintendent of Education, Jim Rex laid out a package of recommendations to the Senate Education Committee.
Rex says it’s time for South Carolina to begin the process of reforming its taxation and school funding systems, “There are all types of dynamics going on right now, but I think the ground is shifting and I think it’s shifting toward people recognizing that the future of our state is tied to how well we educate our citizens. We’re in a global marketplace; we’re not in a gated community. We’ve got to recognize that as a state.”
Rex is calling for funds to be distributed on a per-pupil basis, to each school district.