January 29, 2007
Committee action dominated the news from the General Assembly this week as many bills were heard in the various committees of the House and Senate. Some were killed, some moved forward, and some of the more important legislation was held over a week to try and reach a consensus on the best way to serve the various interests of Virginians.
One of the most controversial bills to reach the Senate floor tightens the rules that control Payday lenders in the state. Over the course of the last year it has become obvious that the rules that control this type of lending are far too lenient. Some wanted to simply outlaw the practice and close them down, however these businesses do serve a purpose that other lenders are not serving.
Consider the dilemma of the individual who has no charge cards and is living paycheck to paycheck. If his car breaks down and he must go to work or lose his job, there are few, if any, options for him to borrow $100 to get his car fixed. Banks and traditional loan companies are generally geared to lending larger amounts of money and setting up reimbursements of a year or longer. Neither focuses on a short term loan that lasts one to two weeks.
If the House of Delegates agrees to what passed the Senate, in July new rules would allow the lender to charge about one dollar a day for a one hundred dollar loan. At the end week, the borrower would have to pay the loan back and they would not be allowed to get a second loan to pay off the first. Additionally, the borrower would be limited to a set number of loans they could have in a set period of time. If the borrower could not repay the loan on time, an arrangement would be required to establish a longer repayment time at a reasonable interest rate.
Another important bill will be voted on in a day or two. This bill is of great concern to small wineries and the farmers that grow grapes for those wineries.
Several years ago Virginia began to allow small in-state wineries to sell directly to restaurants and stores. The federal courts ruled that Virginia could not give that right to Virginia wineries unless out of state wineries were given the same opportunities for commercial dispersion. That would have eventually destroyed small Virginia wineries by the mega California wineries who would dominate the market unchecked, thereby driving prices up because of limited competition.
Thanks to a proposal by Senator Emmitt Hanger, a workable solution was worked out. This will save the small wineries that will be allowed to grow large enough to compete. It will also save many farmers who have turned to wine grapes as an alternative crop to replace such crops as tobacco.
Please contact me about those issues that are important to your family or business. You can reach my office at 804-698-6515, email me, or by mail Frank Ruff P.O. 396 Richmond, Va 23819.