Ending payday lending

Are Southern states getting closer to excising those usurious demons known as payday lenders?

One payday lending company, Advance America, this week told the U.S. Securities and Exchange Commission that it will end its operations in Arkansas after the FDIC announced it will start regulating the industry more strictly.

Advance America is headquartered in South Carolina, and it also recently suspended operations in North Carolina after the bank commissioner there said the company's interest rates were illegally high.

And according to the Facing South blog, Tennessee legislators are considering measures to regulate the payday lending practice:

Here in Tennessee there is legislation that would limit interest on payday and title loans to 36% APR in total instead of the current 24% and up to 20% of the principal in fees. Similar legislation in the last session would have limited the interest to 12% and 10% of the principle in fees, but it went nowhere.

There is also proposed legislation to require more extensive financial disclosures for payday and title loans to U.S. military and their families, and limit interest to 36%.

Payday lending is predatory, and the only reason it continues is that the industry makes big campaign contributions to ensure that elected officials will leave them alone. That needs to stop, and these recent developments are a welcome sign that progress is being made.