31 Gen Spare no tears for Advance America, Virginia’s largest payday loan operator
Pay day loan providers say they'll close storefronts and lay off employees if the state passes reforms capping interest rates at 36 percent. (Ned Oliver/Virginia Mercury)
The company has now decided to flee the commonwealth before new, tougher regulations passed by the General Assembly begin next year.
You can bet the more than 80,000 Virginians who got payday loans , just in 2018 alone, from Advance America and similar companies aren't taking out the hankies. These folks – down on their luck, struggling with health emergencies, or simply short on cash at the end of the month – are instead hoisting a single-digit salute to the South Carolina-based firm and its ilk.
That's because payday, car title and online lenders have so far enjoyed a very sweet deal in Virginia. They've reaped triple-digit, annual interest rates on loans to people who usually don't realize the mess they've agreed to, until it's too late.
Many customers then put good money after bad, taking out even more loans to settle up their accounts. All the while, the borrowers are racking up debt, fees and a jacked-up credit history.
With online payday loan Dyer the Assembly's blessing, payday loan companies set up shop in Virginia in 2002. It wasn't long before journalists and activists who assist the poor began hearing similar tales of woe:
I didn't know that the small loan had such hidden, expensive interest rates. The fees and interest are higher than the amount of the original loan. When I don't pay, companies or their collection enforcers keep calling at home and work, demanding cash.