Consumer Law

Predatory Lending -- Short and to the Point

By Brian Wolfman

On Monday, the Washington Post published an article on payday lending in Virginia. Today, the Post published a letter to the editor written by someone named Leonard J. Koenick, whose letter was apparently prompted by Monday's article.  Here it is:

Payday loans are not the only predatory lending system allowed in Virginia.

I'm a lawyer, and a client recently came to me with something called a "motor vehicle equity line of credit." For the "privilege" of borrowing $300, she had to first pay a $150 "membership fee" and was charged 300 percent interest. Her finance charge was $79.44 per month and, of course, that was only the interest. Her collateral was her car, and she had to give the lender a duplicate car key. She missed one payment; they took her car and sold it.

If that isn't criminal, it should be.

Full post as published by CL&P Blog on February 16, 2008 (boomark / email).