Lawmakers target car title loans

Now that newly passed regulations have severely hampered the payday loan industry in Virginia, lawmakers are setting their sights on car title lenders.

A legislative study committee held its first meeting today at the state capitol to discuss how to approach regulation of car title lenders during the 2010 General Assembly session.

Car title lenders operate under the state’s open-end credit law, which allows them to impose whatever loans terms they want as long they do not charge anything during the first 25 days.

Since Virginia passed laws against payday lending, the number of loans has dropped more than 80 percent from the previous year.

From the Associated Press story via the Times-Dispatch:

Last year, Virginia’s payday lenders made nearly 3.4 million payday loans, or about 281,000 each month. Through the end of May, lenders had issued 226,807 loans, an average of 45,000 per month — an 84 percent decline, according to the Bureau of Financial Institutions.

The number of stores in Virginia has declined more than 36 percent.

With payday lenders fleeing the state, cash-strapped residents are turning to car title lenders.

And so are opponents of payday lenders.

From the Virginia Poverty Law Center:

Like other types of predatory lending, car title lenders charge a ridiculously high interest rate on its borrowers — 300% to 360% APR.  If the borrower cannot pay off the high-cost loans, then the lender repossesses the car of the borrower.  Many times, borrowers take out these loans in the first place because they need money quickly.  Because of this, lenders target certain groups such as low-income individuals, the elderly, immigrants and military members.

For more reading, check out previous BizSense coverage on the payday loan industry:

Va. regulations chasing payday lenders away

Car-Title Lenders Dodge Regulations

Lawmakers seek to close lending loophole

Tougher runoff standards would slow growth

This story first ran in the Chesterfield Observer.

The state government is seeking to reduce the amount of phosphorous runoff allowed by new developments, a measure that could limit the scope of new construction projects if it becomes law.

If implemented, the lower standard would make business growth more expensive because developers would have to reduce the amount of runoff produced by their property, and it would likely require more land to do so.
The Virginia Department of Conservation and Recreation (DCR) proposed reducing the current allowable amount of phosphorous nearly in half, from 0.45 pounds per acre each year to 0.28 pounds.

Developers will incur added engineering costs and may need to buy more land to build retention ponds and drainage systems. Or they could use more permeable surfaces in their design by adding a “green roof” —basically a rooftop garden that absorbs rainwater. Either way, the requirements will make new development more costly.
Retail and office parks would be particularly hard hit because of the amount of impervious surfaces: namely, parking lots and rooftops. The new rules could affect several major projects in the works, such as Watkins Centre in Chesterfield County.

“There’s a good likelihood that the 2 million square feet we have zoned for office space at the Watkins Centre will be reduced by half or more,” said state Sen. John Watkins, whose family has owned the land where the mixed-use centre is to be built.

Though the Watkins Centre already has zoning approved for office and office/warehouse in the southwest quadrant of routes 288 and Route 60, it would need permits from the state for storm-water runoff. The same is true for other already zoned property in the county that hasn’t been developed yet.

Watkins chairs a work group on environmental standards and building codes as part of the Virginia Housing Commission.

“I’ve asked the DCR to give us a complete briefing on the regulations, what the rationale is, the cost benefit and tell us how it is justified,” said Watkins. “I don’t think you’ll be able to build a high school in Chesterfield if these standards are imposed.”

According to Gary Waugh, public relations manager of DCR, the department is responding to the Environmental Protection Agency’s demand for new regulations that require less water runoff.

Phosphorous runoff occurs when rainfall hits rooftops, parking lots, driveways and other impervious surfaces and flows into waterways instead of being absorbed naturally into the ground. Lawn fertilizers are common culprits for increasing phosphorous runoff.

Phosphorous and other nutrients like nitrogen make their way to the bay and feed huge algae blooms. The algae blooms deplete oxygen in the water creating expansive “dead zones” where other aquatic life cannot live. The pollution not only threatens the livelihood of Virginia’s watermen, but also the future ecological health of the bay and its tributaries.

The General Assembly authorized a review five years ago, and a Technical Advisory Committee – including members from the business community and the home-building industry – recommended the lower standard.
“Not all members of the committee agreed with the 0.28 recommendation,” said Waugh. “We believe it is achievable.”

After reviewing comments from the public, DCR will send the proposed regulations to the Department of Planning and Budget for more review. Then the regulations go to the secretary of natural resources and finally to the governor sometime next year.

The proposed statewide regulations are designed to protect the Chesapeake Bay even though just 60 percent of the rivers and streams in the state flow there. Waugh says that’s because so much scientific study has been done on the bay.

“It could be argued that some basins in the western part of the state are more sensitive than the Chesapeake Bay,” Waugh said.

All of Chesterfield County drains to the bay. According to data last year, there was general agreement that the Swift Creek Reservoir is in good health with phosphorous levels trending downward. Business proponents have pointed to that data as proof the existing standards are working well.

Though the current state standard is 0.45 pounds, local governments can lower that amount. Chesterfield previously reduced the standard to .22 for residential development in the upper Swift Creek watershed to protect the reservoir as a source of drinking water. The standard for commercial development stayed at 0.45 pounds.

Chesterfield has been pushing for more commercial development to balance its tax base. Both commercial and residential properties are taxed at the same rate, but residential development requires more services — like schools — so commercial development subsidizes the needs of residents. Chesterfield’s tax rate of 95 cents per $100 of assessed value is 10 cents higher than Henrico County’s, largely because Henrico has more retail shopping and office parks.

Planning Commission Chairman Russell Gulley, who has a long history of protecting the Swift Creek Reservoir, expressed concern at last month’s commission meeting about the lower standard.

“I think the 0.28 for residential is doable,” he said last week, “but there will be higher costs for the development community. There would be an adverse impact on commercial development, but I haven’t heard from those stakeholders. It certainly will have a negative impact on economic development.”

The Virginia Soil and Water Conservation Board will hold five public hearings statewide between June 30 and July 14 to gather public input. The Richmond area meeting will be on July 14 at 7 p.m. at the Virginia General Assembly Building, 910 Capitol St., Senate Room B.

Greg Pearson runs the Chesterfield Observer, which is an RBS News Partner.

Distracted delegates exposed

And you think you have a productivity problem.

A video by a Virginia Commonwealth University journalism student Tracy Kennedy shows how state delegates make use of official time—they check Facebook and shop online using the Capitol’s wireless network.

Kennedy photographed legislators surfing the Internet on their Dell laptops during a formal session of the General Assembly. While covering one day’s session in the hallowed halls of state government, she noticed about 20 delegates browsing various websites. None of which had any bearing on the business of the commonwealth.

Delegate Chris Peace (R-Mechanicsville), along with several others, was checking Facebook. Delegate Bob Brink (D-Arlington) was shopping for furniture at Crate & Barrell while Delegate David Albo (R-Springfield) was looking at the real estate listing for a $3.5 million house in Mason Neck,Va.  Other delegates were found shopping for guns, Civil War memorabilia, and items on eBay.  Below is a video presentation of the legislator’s “on-the-clock” activites on the world wide web.

Kennedy was one of the many reporters contributing to the Capital News Service, a student-staffed news service that covers state government during each year’s General Assembly session. Their stories appear in more than 70 papers through out the state, as well as Richmond BizSense.

Car-Title Lenders Dodge Regulations

The General Assembly continued to tighten the reins on payday lenders this session, while car-title lenders eluded all legislative efforts to regulate their industry. Read more

Digital media tax passes General Assembly

Yesterday the General Assembly approved a 10 percent tax on hotel room media purchases to fund the attraction of film production projects to the state.

The House of Delegates passed the bill with a vote of 69-27. The Senate approved the bill earlier this month by a vote of 36 to 3.

The bill now goes before Governor Tim Kaine for final approval.

Half of the tax would go to the state’s general fund, and the other half will go to the Governor’s Motion Picture Opportunity Fund.

 The tax applies to in-room digital media purchases at hotels, such as pay-per-view movies.

The tax will generate an estimated $750,000 to $2 million for the fund, according to Bud Oakey, a lobbyist for the bill.

The fund is used by the Virginia Film Office to entice production companies to film in Virginia. For the last few years, Virginia has been losing multi-million dollar film projects to other states with more competitive incentive programs.

BizSense previously reported on the bill and the Virginia film industry earlier this month.

Eye on The General Assembly: House budget bill tunes out public broadcasting

The House Appropriations Committee has recommended eliminating the state’s contribution to public broadcasting stations, and the PBS organization in Richmond is seeking viewers’ help to save its funding. Read more

Smoking bills advance in Senate

Smoking is a hot topic in this year’s General Assembly.

Several bills were introduced in the Senate that either ban or regulate smoking in Virginia. The Senate Education and Health Committee voted last week to allow five of those bills to move forward and appear before the full Senate. Read more