Good news on the payday lending front

While Harrisburg legislators were trying to find ways to make usury legal in theory (see here), federal regulators were getting busy on cracking down on the already-illegal practice in the real world by closing the loophole that let in-state banks outsource such obscene-rate loans to out-of-state partners.

Yesterday, Advance America, the nation's largest payday lender with 101 stores in Pennsylvania, announced it would stop issuing new loans on March 27. That follows similar announcements from other payday lenders over the past month.

"For all intents and purposes, this scam is shut down now," said state Sen. Vince Fumo, who favors a bill banning the practice.

This should have been the approach all along, rather than trying to rein in the practice by partially legitimating it (see backstory here). Now, if they continue with that bill, it can only be because they want to have payday lending in the state. No excuses.

I'm glad to see there's somebody willing to stand up for the Little Guy, even if it isn't his own elected representatives...