Payday lenders could not operate in South Carolina under a Senate bill given initial approval Thursday, said a spokesman for the nation’s largest payday lender.
A Senate subcommittee, on a 4-3 vote, passed a bill that would limit the amount of payday loans to 25 percent of a borrower’s gross income and require a seven-day cooling-off period between loans.
The income provision would all but disqualify low-income borrowers from taking on the short-term, high interest loans. The cooling-off period would prevent what is known as loan "flipping," which is when payday lenders collect fees on the continual renewal of the two-week loans.
The bill mirrors a measure passed easily by the Senate last year that died in the House, and has been vigorously opposed by the payday lending industry.
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"I think it will make it very difficult for any operator to continue operating in South Carolina,"said Jamie Fulmer, a spokesman for Advance America, of the Senate bill.
Spartanburg-based Advance America is the largest payday lender in the country, and has seen its business shut down by legislation in several other states, including neighboring North Carolina and Georgia.
Read more at TheState.com