The South Carolina House passed new payday loan legislation with the help of  House Speaker pro tem Harry Cato who expressed his support of “fair regulation.”  Finally, a tempered, well thought out approach to the payday loan industry!

Associate Press reports that the bill was approved by the South Carolina House with a 93-16 vote. Consumers will benefit in that the bill allows them to have one loan at a time for up to $600. In addition, an online database (provided by Veritec) that will be operational by February 1, 2010 will record when loans are made. Payday loan lenders will be required to check this database each time a consumer applies for a loan. Customers who are approved will also have the option of an extended payment plan if they are unable to pay within the standard two week’s time.

Another part of the bill limits customers to 10 successive payday loans. After that, they must wait until at least one payday has passed before they can apply for another.

Of course, Payday loan critics don’t feel these requirements are strong enough but there are substantial studies that refute this erroneous thinking.

However, more thoughtful proponents of financial choice for consumers, Speaker Bobby Harrell for example was quoted as saying:

Regulating the practice and enacting consumer safeguards is the right thing to do. These loans are meant to be short-term financial solutions for unforeseen expenses; capping the loan amount and creating a statewide database to ensure that someone can only have one loan at a time will help prevent individuals from falling into a bottomless cycle of debt.

We applaud Speaker Harrelland Speaker pro tem Harry Cato for their insight and understanding that everyone needs access to small, temporary loans for emergencies!