Roddie Burris, The State

The Senate will get its first crack at the payday lending debate today, and some senators expect they will be tougher on the industry than the House was.

Sen. Wes Hayes, R-York, leads a Senate subcommittee that will debate a bill the House passed three weeks ago and also will weigh six other payday lending bills filed in the Senate. Those bills seek to either regulate or ban the controversial short-term loans that have been outlawed in some states.

“What passed in the House is good,” said Hayes. “But the concern is it doesn’t go far enough.”

In a highly emotional House debate,, representatives approved a bill that, for the first time, would regulate payday lending. The bill:

• Raises the amount a borrower may get in a single loan to $600, more than any other state in the Southeast allows

• Establishes a database to track loans to ensure borrowers don’t assume multiple loans

• Requires a cooling off period between loans after a borrower has 10 consecutive loans

The payday lending industry has not publicly backed any regulation. But proponents of the House bill argued strongly against banning the industry and for the access to quick, small-dollar loans for consumers who might otherwise have limited borrowing options.

Consumer advocates said they think the House bill is friendly to payday lenders and does not address what they consider abuses that trap borrowers in debt.

For example, last year Hayes authored a tough amendment that won overwhelming approval in the Senate — but died in the House — that limited payday loans to $500 and put even lower limits on low-income borrowers.

Consumer advocates also want to cap the interest rates payday lenders charge and ban what is known as “flipping.” Payday lenders charge roughly $15 for every $100 borrowed. Annualized that is 391 percent interest.

Flipping is using one loan to pay off successive loans while running up exorbitant fees.

“I’m hoping the Senate will report out something substantially close to the Senate version passed last year,” said John Ruoff, research director of South Carolina Fair Share.

Approved by the Legislature in 1998, payday lending has been become a lightning rod for controversy in South Carolina and other states.

The Senate came within three votes of banning payday lending last year. Since then, the industry has spent more than $300,000 on campaign contributions and lobbyists, spreading money to both Democrats and Republicans.

Some senators say the climate for cracking down hard on the industry may have softened somewhat in the Senate since last year, when the body came near to banning it.

The Senate has a bill identical to the one the House passed that has 20 of 46 senators signed on as cosponsors. That bill’s chief sponsor is Senate President Glenn McConnell, a Charleston Republican.

Jamie Fulmer, spokesman for Spartanburg-based Advance America, the nation’s largest payday lender, said that approach — to regulate the industry instead of passing laws that either ban it or make it unprofitable — is much more tenable to the industry.

“From our perspective, what passed (in the House) clearly sent the message they were more interested in reforming the industry than in eliminating it,” Fulmer said.

The opportunity to further restrict the industry is present, said Sen. Joel Lourie, D-Richland.

“Personally, I think the industry is predatory, and I don’t think they were ever willing to come to the table before last year.”

Sen. Shane Massey, R-Edgefield, a co-sponsor of Lourie’s bill agreed regulations are in order.

“There is still a substantial part of the population that can’t make ends meet,” Massey said. “So banning may not be the answer. If you are not going to ban them, then you regulate the heck out of them, and that’s what this bill does.