AARP Virginia Letter of Support
AARP Virginia is proud to be a founding member of the Virginia Partnership to Encourage Responsible Lending (VaPERL). We enthusiastically support its mission to promote responsible lending products and discourage predatory lending in Virginia because of its pronounced negative effects on Virginia’s most vulnerable citizens.
Consumers, particularly those who are considered high-risk borrowers or who have low incomes or live on fixed incomes, often have difficulty obtaining credit on reasonable terms. They are commonly relegated to alternative financial services (AFS) and may be subject to deceptive and unfair lending practices, such as hidden fees, exceedingly high interest rates, prepayment penalties, extreme default penalties, the “packing” of expensive credit insurance, and multiple rollovers.
Although these AFS establishments are often conveniently located and open late, the fees that these outlets and other alternative financial service providers charge for cashing a check or making a small loan are generally higher than at traditional financial institutions. For midlife and older people with fewer years of earning potential prior to retirement, the serious long-term consequences of such decisions increase the importance of financial literacy in an increasingly complex financial marketplace. As a result of factors such as globalization, technological advances and deregulation, today’s consumers have an endless variety of products and services from which to choose. Seniors trying to make informed decisions often need unprecedented levels of sophistication and knowledge to sift through massive amounts of complicated product information. The decision to use these products greatly affects retirees’ financial well-being and independence.
AARP Virginia will continue to work with VaPERL to ensure legislatively mandated reforms in the 2007 Virginia General Assembly and beyond.