Officials want to end usurious loan practices

By Linwood Outlaw III-loutlaw@nvdaily.com

FRONT ROYAL -- Warren County officials are joining other localities in asking state legislators to enact strict laws that will prohibit predatory lending practices in Virginia.

On Tuesday night, the Board of Supervisors unanimously adopted a resolution asking that Gov. Bob McDonnell and the General Assembly, at its next legislative session, consider implementing regulations that will cease such inordinate practices, particularly those that could exploit citizens called to serve in the armed forces.

Currently, there are no businesses in Warren County using usurious lending practices such as cash-and-go or payday loans, Assistant County Attorney Dan N. Whitten said.

However, county officials are calling on legislators to enforce statutes in order to further deter these types of businesses, Whitten said. Specifically, legislators are being asked to impose an interest rate cap of 36 percent -- calculated as an effective annual percentage rate including all fees or charges of any kind -- for any consumer credit extended in the state.

Additionally, local officials are seeking provisions that will prohibit a creditor's use of a personal check or other device as a means to gain access to a consumer's bank account. Officials also want the General Assembly to incorporate into state code safeguards pertaining to consumer credit for military personnel as reflected in the Military Lending Act.

Local officials are particularly concerned that "lending institutions may be taking advantage of certain people that can ill afford to pay the interest rates that they get themselves into," Board of Supervisors Chairman Archie A. Fox said. More than 30 localities have adopted similar resolutions seeking payday lending reform, including the towns of Front Royal and Strasburg, Frederick County and the city of Staunton.

Also on Tuesday, the supervisors unanimously adopted a resolution asking the Virginia Department of Transportation to consider opening an undeveloped rest area on eastbound Interstate 66 to tractor-trailer parking.

Officials have lobbied VDOT numerous times in recent years to open the rest area in order to accommodate a "tremendous increase" in truck traffic, County Administrator Douglas P. Stanley said. The spike has been attributed to a number of factors, including increased industrial development in the U.S. 340-522 corridor, the presence of interstates 66 and 81, and increased freight traffic. Truck drivers also are limited in the number of hours that they can drive and need to rest a prescribed number of hours, "and there are no rest areas and limited private commercial developments that allow for the parking of tractor trailers" in the county, the resolution states.

The supervisors have been working to adopt ordinances and ramp up enforcement through the Sheriff's Office in order to keep such vehicles from damaging property near the Riverton Commons and Crooked Run shopping centers, Stanley said.