Payday lender says Senate bill will kill industry

COLUMBIA --- A leader in the payday lending industry says legislation that advanced Thursday will doom the business in South Carolina as it ties borrowing to income and forces waiting periods between loans.

"I think it will make it very difficult for any operator to continue operating in South Carolina," said Jamie Fulmer, a spokesman for Advance America Cash Centers Inc. The Spartanburg-based industry leader has seen its business shut down by legislation in other states, including Georgia.

The bill "places these arbitrary limits on consumers' ability to access these products," Mr. Fulmer said. With South Carolina running the second-highest unemployment rate in the nation, he said, that will be bad for consumers who need emergency cash.

Consumer advocates and bill supporters say emergency loans can too easily turn into perpetual borrowing to refinance a loan and that lenders rely on repeated fee payments on loan rollovers for profits.

Under legislation sent to the Senate Banking and Insurance Committee on Thursday, consumers could borrow no more than $600 or 25 percent of their income. A state database would be set up to bar consumers from taking out multiple loans, and they would have to wait a week before borrowing again.

Meanwhile, the industry would have to pay $500 to license each location, with the money going to regulatory and law enforcement efforts. Each licensed location would pay a $1,500 fine for a first offense, lose its license for a year on a third offense and permanently lose the license for a fourth.