A deal to settle Senate differences over regulating payday lending stalled Thursday, though lawmakers said they closed ground in behind-the-scenes negotiations with industry giant Advance America.
Some lawmakers are predicting next week will be do-or-die for the thorny issue, which senators say they are tired of debating but can’t seem to resolve.
“My sense is we’re 90 percent of the way there on payday lending,” said Senate Rules chairman Larry Martin, R-Pickens. “We’re going to come together Tuesday, or that bill is not going anywhere.”
Led by former state senator and 2006 gubernatorial nominee Tommy Moore, Columbia attorney and lobbyist Dwight Drake, and lobbyist Carol A. Stewart, the payday lenders met for more than an hour Thursday above the Senate chamber with Republican Sen. Wes Hayes, R-York, Sen. Joel Lourie, D-Richland, and others seeking to rein in the unregulated industry.
The two sides — payday lenders and the steadfast group of senators who insist meaningful restraints be put on the $155 million-a-year business in South Carolina — are trying to end a fight that threatens to drag on into the 2010 Senate calendar year.
“I want a tough bill,” said Darlington Democratic Sen. Gerald Malloy, an attorney and one of the industry’s most consistent critics. “We need to send a message there was a mistake made (by the Legislature),” in allowing payday lenders to come into the state 10 years ago, Malloy said.
“As a native South Carolinian, I’m ashamed and offended (by what this industry is doing in our state),” he said.
Malloy said the bill the Senate is considering is too weak to adequately protect S.C. consumers from the high-interest payday loans he says most South Carolinians do not earn enough money to afford.
The Senate bill allows loans up to $500 in a single transaction and calls for a two-day cooling off period between consecutive loans. The $500 loan limit would be the highest allowed by any state in the Southeast, critics point out, at a time when other states are tightening restrictions on payday lenders by capping interest rates.
Senate President Pro-Tem Glenn McConnell, R-Charleston, is sponsoring the Senate bill, which has wide support and, the senator has said, is more likely to win House approval.
“The two sides are negotiating. They’re getting closer; they’re not there,” McConnell said after the would-be deal stalled. But the opposing sides told McConnell if they had the weekend to continue their talks they could get closer, or at least have a better idea of where each stood, he said.
Senate opponents of the payday lending bill want to tie payday loans to a borrower’s income, with a longer cooling off period.
The Senate easily rejected a bid to do that in a lopsided, 27-14 vote Wednesday.
But Hayes said tougher regulations still could be in the offing.
“It’s going in the right direction,” he said after Thursday’s meeting ended. “I think we will be compromising or debating on Tuesday.”
Reach Burris at (803) 771-8398.