RICHMOND, Va. (AP) - A Virginia senator has introduced legislation to crack down on car title lenders while also taking on payday lenders who are getting around new regulations that took effect Jan. 1.
Democratic Sen. Mark Herring of Loudoun introduced a bill Thursday to cap the interest car title lenders can charge at 36 percent.
Virginia is unique in that car title lenders operate under the open-end credit law, which allows companies to charge anything they wish as long as they don't require any payment for the first 25 days.
Payday lenders began offering products under that law, like lines of credit, after the legislature passed restrictions drastically reducing the number of loans borrowers could take out annually.
Herring's bill would hold those loans to the 36 percent interest rate cap.
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