Date Published: February 7, 2007   

House members talk about limiting payday lenders

The Associated Press

House members talked about interest limits on payday lenders Wednesday, prompting the industry to say a cap on their charges will run them out of business.

The loans are "the crack cocaine of the lending industry," said Rep. Alan Clemmons, a Myrtle Beach Republican and the bill's chief sponsor. "It's very easy to get into, but very difficult to get out of."

With North Carolina and Georgia banning those loans, South Carolina has become "payday lender mecca," Clemmons told a House Labor, Commerce and Industry subcommittee.

The legislation has broad support with 85 of the House's 124 members supporting it.

Clemmons says the industry can survive on a 36 percent annual interest fee cap set by the bill. But industry representatives say the cap will shut them down.

Check Into Cash Inc. lobbyist Jabo Covert said the legislation might as well be a complete ban because lenders would take in only about $1.40 on a $100 loan. He challenged anyone to make a living off of handing out $100 bills to strangers for what amounts to a dime a day.

The panel took no action on the bill Wednesday. Subcommittee chairman state Rep. Wallace Scarborough, R-Charleston, told the two sides to come up with a compromise.