Bill Slams Payday Lending in South Carolina

Is this week’s new payday lending law going to help or hurt South Carolina consumers?

The law protects consumers starting Monday by only allowing one loan at a time and tracking those loans in a database. However, the law doesn’t grandfather those who had two or more outstanding loans prior to Feb. 1.

The law also doesn’t control how payday lenders reimburse themselves for outstanding multiple loans. It could be a run on the bank and lead to bounced checks and overdraft fees for consumers. But lenders must now offer extended payment plans to consumers who can’t pay off their loans.

On the other hand, the law increases the amount of loans from the previous $300 to $550.

In addition to the dubious effect on consumer’s well-being where payday loans are concerned, the law has caused the number of lenders to dwindle as the opportunity for profit is shrinking from about 1,200 to nearly 775.

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