Assembly 2011: Lawmakers expand car-title lending, budget conference moving slowly
The House and Senate have voted to expand the controversial practice of car title lending in Virginia to include vehicles registered outside of the Commonwealth ... and House and Senate Budget Conferees say there is little progress in talks to develop a cohesive state spending plan.
A large bi-partisan group of legislators have been pushing for restrictions on high-interest payday and car title loans for years. Last session, for the first time, interest rate caps were put in place, as well as other restrictions.
However, this year, a bill from Democratic Senate Majority Leader Dick Saslaw would extend access to car title loans to vehicles registered outside of Virginia. The bill passed the Senate overwhelmingly and went before the House yesterday.
Democratic Delegate Joe Morrissey of Henrico.
Morrissey: This bill here completely extinguishes everything that we did last year.
Danielle Battle is who we’re protecting. Danielle Battle lived in Fort Washington and in the end of 2009, she offered her car, 2006 Nissan, for collateral. All that she wanted was 2,500 dollars and she borrowed 2,500 dollars. She made 800-dollar payments a month for almost 8 and a half months. After she had paid 7,000 dollars, Danielle still owed 7,000 dollars on a loan that had originally lended 2,500. She wasn’t able to pay that lump sum of 7,000. She went out one morning and her car was gone.
These loans are 180 percent to 264 percent. Call it whatever you want. Put as much lipstick on it as you want. That’s usurious. This is a bad bill, it’s mean spirited for the other side to bring this bill back after we had some, some, just a small amount of improvement last year. I hope we not only kill it, I hope we put a stake through it and I hope we send it back to the Senate patron.
Republican Delegate Bill Janis of Henrico.
Janis: If you’re a moral busybody and you insist on substituting your moral judgment, your financial judgment, your fiscal judgment, for those of every other person in the Commonwealth of Virginia, then vote against the bill, but don’t kid yourself, you’re not doing these people any favors, all you’re doing is you’re stripping the person who needs fast cash, who doesn’t have a wallet full of credit cards like most of the people sitting on this floor here today, you’re simply just guaranteeing that they’re going to go get an open-ended loan, where they won’t have any of these safeguards. Vote for the bill.
The bill ultimately passed on a 51 to 47 vote, with Republicans and Democrats alike voting on both sides of the issue.
In other news, House and Senate Budget Conferees appear to be off to a slow start on ironing out their differences over their proposed amendments to the state’s two-year spending plan.
Republican House Majority Leader and budget conferee Kirk Cox of Colonial Heights.
Cox: If you take all that spending in the Senate, it will take 2 percent revenue growth next year to just get us even. And let's be honest what’s going on here. There’s an election coming up. Spend the money now. You get credit. All the groups love you and then you leave Governor McDonnell with the problem in a year. So he’s got basically two choices; he can cut a lot of that spending that you put in there or he can raise taxes and I think if you look at a lot of the rhetoric, that’s exactly what the intent is.
Conference is about compromising and we felt very strongly about our structurally balanced budget, and we’ve articulated that and of course, they feel very strongly about their spending. We’ve made what I consider an extremely fair offer, that if accepted I think might get us out of here early and that is a 50/50 offer. That’s what compromise is about. We said the following: we’ll take basically 50 percent from our one-time savings and put it toward your spending, you take 50 percent from your spending and you put it toward the structural pieces like AST and Rainy Day. Let's agree on the money amount and then we can work down on how that’s basically spent. That’s extremely fair.
Democratic Senator and budget conferee Edd Houck of Spotsylvania.
Houck: We’ve responded back to them. In some ways, we’ve actually moved to some of their positions on the splitting. The odd part about their decision is they want to split it, but then negotiate the items that we split, so that’s not quite the way we want to do it. If we want to split it, we ought to honor each other’s elements and then go on with it from there.
Governor Bob McDonnell says he's been in contact with the conferees and is optomistic that they can finish their work on time. Lawmakers now just have 4 days to produce a final spending plan before they adjourn on Saturday.
Craig Carper, WCVE News, Capitol Square