Virginia panel to continue work on lending law

AP News
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Posted: Dec 14, 2009 5:19 PM

A Virginia legislative panel will continue its work in hopes of reaching a compromise on how to regulate car title lenders before the General Assembly returns Jan. 13.

The lenders are unregulated in Virginia. They operate under the open-end credit law, which allows them to charge unlimited interest after a 30-day grace period. Most charge around 300 percent annual finance charges, and they repossess the borrower's vehicle if he can't repay the loan.

Advocates and some lawmakers hope to cap the interest the lenders can charge and to limit the amount of time the loan can be outstanding. The industry argued at the meeting Monday that those changes would put them out of business.

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Car title lenders have left most states that have enacted interest rate caps.