RICHMOND, Va. (WWBT) - Gov. Ralph Northam signed a consumer protection law that expands access to affordable credit on Monday.
The Virginia Fairness in Lending Act reforms payday and title loans and expands access to credit. The legislation, sponsored by Sen. Mamie Locke, D-Hampton, and Del. Lamont Bagby, D-Henrico, ensures that loans have affordable payments, reasonable time to repay and fair prices.
“We have been working for years to stop predatory payday and title lenders from stripping wealth from communities throughout the state, especially communities of color,” Bagby said. “Finally, we’ve righted this wrong. Now Virginia families will save more than $100 million each year going forward, money that was once being extracted from the Commonwealth.”
According to a release from the governor, Virginia was previously known as the “East Coast capital of predatory lending.” Payday loan companies charged consumers in Virginia three times higher prices than in other states. One in eight title loan borrowers had a vehicle repossessed, which was one of the highest rates in the country.
“We are proud to usher in a new era of responsible lending,” Locke said. “Payday and title lenders will no longer be able to take advantage of consumers. Lenders who offer transparent loans can offer reasonable products and we have strong new tools to enforce the law against bad actors.”
The bill was signed by Northam at the Wesley Memorial United Methodist Church on Monday, Aug. 3.
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