Va. bill cracks down on car title, payday lenders.

A Virginia senator introduced legislation Thursday to crack down on car title lenders while also taking on payday lenders who are getting around new regulations that took effect Jan. 1.
Sen. Mark Herring's bill would require any company making loans under Virginia's open-end credit law to charge no more than 36 percent annual interest.
Car title lenders operate in Virginia under the open-end credit law, which currently allows companies to charge anything they wish as long as they don't require any payment for the first 25 days.
While the General Assembly fought for three years before coming up with the payday lending regulations that passed last year, legislators haven't taken on car title lenders before.
Payday lenders lend up to $500, holding a paycheck as collateral.
Car title lenders, however, lend up to 50 percent of a car's value. The borrower, who must own the car, hands over a copy of the keys and the title so that if he or she doesn't repay the loan it can be repossessed.
What worries opponents is that with the new types of loans payday lenders have access to borrowers' accounts and can automatically take out their payment, something they are forbidden from doing in the new law.

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