State lawmakers have introduced legislation they hope will stop abuses by certain small loan companies commonly called payday lenders. The General Assembly passed a bill to restrain the industry last year. But Richland County Senator Vincent Sheheen says nearly 100 lenders have switched their licenses from the newly regulated payday lending status to another category, that of “supervised lenders.” Sheheen says supervised lenders are not the same as payday lenders, have traditionally given longer payment periods and not charged as high an interest rate.
The bill passed last year stipulates that those businesses registering as payday lenders are tracked by a database. They also have to assure that borrowers have a cooling off period between loans.
Sheheen says for too long, many payday lenders have abused South Carolinians who can afford it the least. He says the bill that passed last year was compromised by Attorney General Henry McMaster’s ruling that existing payday loans don’t have to be included in the database created to track lender and borrower activity. Sheheen says that leaves persons with existing loans in a vulnerable position.
(Payday lending press conference MP3 8:20)
Payday lending press conference
Richland County Democrat Joel Lourie was among those who voted last year to completely ban payday lenders from operating in the state. That attempt failed.
I’m reminded of a book I used to read to my children called “If You Give A Mouse A Cookie.” If you give a mouse a cookie, he’ll ask for a glass of milk. The ink wasn’t dry on the bill we worked tireless on last year. We locked down the Senate. The ink wasn’t dry and there they were again, scheming to circumvent the law, trying to figure out how to stick it to the citizens of South Carolina.
Greenville County Republican David Thomas chairs the Senate committee putting forth the proposal. He drafted the bill. Thomas said that lawmakers have tried to work with the industry for eight years, but each time lawmakers pass laws, the lenders find a way around them.
Thomas said if this last chance proposal does not work, he will work to remove the payday industry from South Carolina completely. It has already been banned in some states.