Virginia Gov. Bob McDonnell signed into law a bill that authorizes car title lenders to issue loans to out-of-state residents.
The industry has been regulated to the point of non-existence in surrounding states; last year, Virginia voted to regulate how much lenders, who use car titles as collateral for loans with high interest rates, can charge clients. People can lose their cars if they fall behind on payments.
The law takes effect July 1.
The Virginia Partnership to Encourage Responsible Lending, a group combatting predatory lending in Virginia, blasted the move.
“People are very vulnerable in this economy and desperately seeking help,” said David DeBiasi with AARP Virginia. “The last thing they need is ‘help’ that turns out to be exploitation.”
