COLUMBIA — Supporters of restricting, or outright banning, payday lenders in South Carolina pushed Tuesday to keep the matter alive in the last few days of the legislative session.
Sen. Robert Ford, a Charleston Democrat and a lead advocate for the legislation, blocked all House bills on the Senate calendar from moving forward until the matter is revived.
"When you get people losing their homes, can't send their kids to college, and we're in hard economic times, something needs to be done," Ford said. "We've got to look out for those people."
Payday lenders let people take out small, short-term loans, often at a high interest rate, against future paychecks. Those loans are not available through traditional banks for people with poor credit.
Industry critics argue that the lenders trap borrowers in a cycle of debt that forces them to take out new loans to pay off the old ones.
Ford's action Tuesday was prompted by House Labor, Commerce and Industry Chairman Harry Cato, R-Travelers Rest, who decided last week that the legislation had hit a roadblock and ended discussion on it for the year. After June 5, all bills not sent to the governor die.
Cato said it became apparent that the members would be unable to reach consensus. They had met at least six times on the matter and had a lot of behind-the-scenes conversations, he said.
Sen. John Hawkins, R-Spartanburg, said the House's inaction is a "great disservice to the victims of payday lending." He wants the industry banned and called it "legalized loan-sharking."
Hawkins is one of about a dozen legislators participating in pending state and federal lawsuits against payday lenders.
Jamie Fulmer, public affairs director for Spartanburg-based Advance America, the nation's biggest payday lender, said Hawkins' dual position leaves the industry not being able to trust in what capacity the lawyer-legislator is acting.
"It very clearly blurs the line," Fulmer said.
Hawkins said he sees no conflict and said raising concern about it is an attempt by the industry to divert the spotlight.
The industry is willing to sit down with legislators and work out reasonable reforms but, Fulmer said, the push for restrictions is a guise by some legislators who want to see the lenders banned in South Carolina. Fulmer said the industry provides a valuable service for borrowers who use it responsibly.
"A ban would deny thousands of folks the ability to get a short-term loan when they find themselves with an unbudgeted or unexpected expense," Fulmer said.
Ford, who sponsored the bill, originally pushed to see payday lending banned in South Carolina like it has been in North Carolina and Georgia. He was persuaded to support restricting the loans to one per borrower at a single time, tied to income level.