State lawmakers have overridden the governor’s veto of stricter regulations for payday lenders. The vote was 105-4 in the House, 39-3 in the Senate, after the General Assembly returned to the statehouse to deal with vetoes.
Before a vote on the bill was taken on the Senate floor a month ago, Darlington Democrat Gerald Malloy held out his support of the compromise until the last minute, saying that the bill didn’t do enough. Tuesday, he went a step further, and said that supporting the legislation would put the smallest payday lenders out of business, and favor large companies which would benefit from the new regulations.
He read from a letter sent to him by a small lender who operates only one office. ” ‘ They want this bill because us small guys will dwindle away and they’ll have a monopoly.’ So I put that before you. And is that what we’re doing? Is that what it will be, when we look at this like Monday morning football, after it’s done?”
The legislation would create a database that would be used to prohibit borrowers from taking out more than one loan at a time, requiring them to wait a day before taking another loan, once one loan is paid off. After seven loans, that time period changes to two days. It would limit the loan amount to $550.
When the bill came back to the floor Tuesday, Republican Senator Kevin Bryant of Anderson immediately supported the governor’s veto, saying that the database was a dangerous collection of personal information that could be misused. “My fear is, could a dishonest person, or a previous employee, do some previous damage to someone’s identity. ”
Democratic Senator John Land assured Bryant that the legislation was full of safeguards to prevent misuse of the database.
Greenville Democrat Ralph Anderson told Bryant that people were suffering because of the payday industry. “They encourage people to take out loans, knowing that they can’t, and the penalty is too great. And people are making millions and millions of dollars off of people who can’t read and can’t understand what they’re doing.”
As the veto debate concluded Tuesday, Richland County Republican Senator John Courson said there will ultimately be a movement to ban the payday lending industry in South Carolina, implying that he would be supportive of that push.