South Carolina legislators introduced new payday loan legislation that will protect consumers from the so-called “cycle of debt” and allow thousands of payday loan employees and entrepreneurs to remain in business.
The bills sponsors introduced payday loan legislation that permits consumers to take out no more than one payday loan at a time for up to $600 dollars and enroll lenders in a state database before granting loans. Lender fees would be used to set up and operate the database, which would instantly report when loans are made. The database would track consumers and make sure they don’t have more than one loan at a time. Lenders are allowed to charge $15 for every $100 borrowed for the loans that have to be repaid in two weeks. For people that can’t pay loans on time, lenders will be able create payment plans that aren’t allowed under current law.
We applaud the direction the legislators of South Carolina are headed. It protects consumers from the few payday loan operators who abuse them. It allows the payday loan product to exist. And the commercial property owners can continue to lease their locations to payday loan companies in South Carolina.
Consumers by the millions use payday loans in Canada, the U.S.A., Australia, New Zealand, Korea, Barbados, the Bahamas, and the United Kingdom every year. There is no doubt that demand by consumers for the payday loan product exists. The Legislators and regulators must find a way to meet the needs of consumers and protect them from abuse by the few operators that exist in every industry including banks, credit card companies, loan modification companies, etc.