I Was There When Payday Lending Was Legalized

When I was a kid, there was a series of books called “I Was There.”  It was all about onlookers, usually small children, who were there when famous events occurred, like the battle of Lexington or Lincoln’s speech at Gettysburg. 

My mom bought the books and I read them all.

Fast forward to summer 2009.  One of the biggest topics during the Democratic primary has been “payday lending” and who will do the most to stamp it out.  Of course, payday lending was legalized in Virginia only a few years ago.  I know.  I was there.

It was the 2002 session.  I was a freshman delegate still new enough to be reading all the bills that we voted on.  The payday bill was HB 940 sponsored by Harvey Morgan (R-Middlesex).  I remember that because Harvey was a senior member on Commerce Committee.  He’s also become a very good friend.

The bill came out of the Commerce Committee on a 15-7 vote.  I remember reading it the night before our floor vote.  The thing that disturbed me was that we were creating a major exception to our usury law.  For what?  A lender using a paycheck as security?  It sounded like loan sharking to me. 

We had at least an hour of argument.  The bill eventually passed 73-27.  I voted “no.”  The division was not ideological.  In fact, the Blue Dog conservatives in the back row (Johnny Joannou, Jackie Stump and Bud Phillips) all voted “no.”  So did Speaker Wilkins.   And fellow freshmen Clay Athey and Clark Hogan.

Not exactly the line-up at the Arlington JJ Dinner.

So the measure passed with a bipartisan vote.  Why would a Democrat vote for it?  Perhaps a “pro business” gesture.  Perhaps the argument that “it will happen anyway so why not regulate it.”   There was no recognition that payday lending would overwhelm our cities within a few years. 

The bottom line is that it was a bad idea to let payday lending into Virginia.   And it happened only a few years ago. 

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