The Post & Courier
In the pursuit of economic justice and prosperity, the importance of practical legislation cannot be overstated. The bill S.910, introduced by Sen. Tom Davis, represents a decisive move toward fair lending practices and protecting the financial well-being of the state's vulnerable residents.
As advocates for economic opportunity and wealth creation in low-income communities, we recognize the detrimental impact of predatory lending on communities. With more than 45 years of combined history dedicated to fostering economic opportunity and financial wellness, our organizations — CommunityWorks and the S.C. Association for Community Economic Development — have witnessed firsthand the repercussions of easy access, exploitive, high-cost payday, installment and auto title lenders in South Carolina.
The predatory lending industry has constructed a business model targeting individuals in poverty, exploiting them when they face financial hardships such as car repairs, unexpected medical costs and increased food prices. The industry’s focus is only on ensuring the loan payment does not exceed the borrower’s income, with little consideration for the person's actual ability to repay. Then once borrowers are hooked, these lenders call, text and email to refinance the loan after only a couple of payments are made. Each time a loan is flipped or renewed, new ancillary products are added, and the borrower may get a check for another $100, increasing the outstanding principal balance. The result is a debt cycle that is difficult to break.