The impact of payday lending has been felt across Virginia. Petersburg has a payday store for each 2,500 residents, about four times the state average of about one store per 10,000 residents. So the Petersburg VOP Chapter chose to work on this issue for very good reasons.

The Central Shenandoah Valley, on the other hand, reflects almost exactly the state average, with 23 stores for about 228,000 residents of Augusta and Rockingham Counties and the cities they enclose. But the Central Shenandoah Valley Chapter of VOP also chose to work on this issue, conducting public events, and talking to candidates in last November’s legislative elections, where predatory lending was raised as an issue in the press and at campaign events. Some Valley elected officials, of both parties, realized that this issue struck a chord with their neighbors — for very good reasons.

On the night of September 13, the Valley saw the beginning of a new way for Virginians to express their outrage and concern over predatory lending. After it was over, Staunton City Councilman Bruce Elder said, “What we have done tonight is we have thrown a pebble in a pond. The ripples by the time they reach Richmond should be a tidal wave.”

That “pebble” began an unprecedented series of actions by local governing bodies across the Commonwealth of Virginia. Boards of supervisors as well as city and town councils from every region of the state have passed resolutions calling on the General Assembly of Virginia to cap interest rates charged by payday lenders at 36 percent APR when the legislature convened for the 2008 General Assembly session beginning on January 9.

Councilperson Elder, with the help of Staunton’s City Attorney, developed the resolution calling for the General Assembly and the Governor of Virginia to take action during the 2008 session to “prevent further exploitative payday lending practices, including but not limited to .. enactment of an annual interest rate cap of 36 percent for any consumer loans made in the Commonwealth of Virginia.”

The evening was dramatic. VOP intern Joe Doherty said, “It was incredibly exciting! The payday industry brought in a spokesman, and around half the audience were payday lending industry workers. But the Council voted unanimously for the resolution!”

VOP members and supporters were also present. John Whitfield, executive director of Blue Ridge Legal Services, spoke for the resolution, telling the Council that his agency has clients every week “trapped like quicksand in a cycle of debt that is created by the payday industry.”

The payday industry spokesperson that night was Dan Drummond, a lobbyist for Advance America, the nation’s largest payday lender with more than 2,700 locations nationally. He told the Staunton City Council, “I don’t believe that the views of city council are the views of the majority of Virginians.” That could have intimidated other local governments — but instead, in the three months following passage of the resolution by the Staunton City Council, other localities across the state have joined in calling for legislative action. Bruce Elder initiated communications with local officials throughout Virginia, encouraging them to follow Staunton’s lead and adopt a local resolution of their own. Also participating actively in this endeavor were VOP organizers around Virginia working with local volunteers and elected officials urging action by county boards of supervisors and city and town councils. (See stories about Washington and Fairfax counties in this issue.)

The number of localities having passed resolutions exceeded fifty, with others still considering it. These communities included some of Virginia’s largest cities — Alexandria, Chesapeake, Hampton, Newport News, Norfolk, Richmond and Roanoke — as well as larger counties, including Arlington, Chesterfield, Fairfax, and Henrico. More than half the population of Virginia lives in the localities that have called on the General Assembly to protect the citizens of Virginia by capping payday loan interest rates at 36 percent APR. Nor is the effort limited to Virginia’s most populated areas. Communities in every Congressional District in Virginia have passed this resolution, including small ones like Duffield (population 62) in far Southwest Virginia and Montross (population 315) on the Northern Neck.

The General Assembly is expected to take these resolutions very seriously. VOP is proud to have played a part in this astonishing movement of citizens and their local representatives — a “tidal wave” of civic action that will have an impact not just on this issue but on how decisions are made in Virginia in years to come.

For more information, contact Joe Szakos at (434) 984-4655 x222 or szakos@ntelos.net.