What’s going on in Virginia?

The state of Virginia is now offering short term loans to it’s 100,000 state employees at 25% annualized interest. There are other requirements and they’re limited to two of these a year. Timothy Caine, the governor of Virginia, is pretty proud of this fund.

That’s fine, but this article is bunch of self serving, pork for the governor, by the governor. I did like this comment by Robert Diedrich and I think it’s worth sharing:

It is disingenuous and misleading to suggest that payday loans carry a “400% annual interest rate” when the average payday loan is repaid within 30 days for an interest rate between 10-20%. Here is another fine example of a politician talking a populist game by villainizing those who would put their capital at risk to provide a vital service; credit for those who can’t get it anywhere else. I have no problem with sensible regulation of this lending market, but the Governor should at the very least recognize the service being provided, the risk to the capital providers, and stop demonizing an industry that generates tax revenue and performs a legitimate service to society. Socializing the credit risk of these borrowers is not the answer. By definition, “payday” loans are made to people with jobs, and they have to be greater than 18 years of age: responsible adults engaging in legitimate commerce on clearly identified terms. Stop trying to fix problems that don’t exist, with other peoples money.

Payday Pundit also makes a pretty good point about Virginia’s government loan program.

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