Unfinished business

It is reassuring that the General Assembly intends to take care of some important unfinished business when it begins a new session on Jan. 13.

This is year one in a two-year legislative cycle. All bills before the Legislature must be introduced anew.

Lawmakers recently got their first look at 116 pre-filed bills for the session. Among those measures are bills that address two issues of vital importance to the state: payday lending and the cigarette tax.

A bill limiting the payday lending industry passed the Senate last session but never made it to the House floor. This session, several House bills seek to outlaw the practice outright, while others want to cap interest charges on loans to 36 percent.

A national recession is a particularly bad time to give loan sharks the freedom to prey on desperate borrowers as they see fit. While federal officials are seeking ways to regulate the credit market to protect consumers, the state shouldn't ignore the threat of predatory lenders continuing to trap borrowers into more endless rounds of high-interest loans.

Both Georgia and North Carolina have banned payday lending, which makes South Carolina a haven for the industry. South Carolina ranks among the 10 states where consumers pay the most for small loans.

We would like to see an outright ban on payday lending in the state. But, barring that, the bill that passed in the Senate last session is a good template for a House bill.

The Senate bill limited borrowers to one loan at a time and required a seven-day cooling-off period between loans. The measure also capped the amount of a loan at 25 percent of the borrower's income or a maximum of $500. The bill also required the State Board of Financial Institutions to keep a database of payday loans to prevent borrowers from shopping for loans from one payday lender to another.

Unfortunately, the bill did little to reduce the inflated interest on payday loans. A lender could have charged $90 in fees for a two-week loan, the equivalent of a 390 percent annual interest rate.

We hope the emerging House bill addresses that shortcoming.

Also among the pre-filed bills are measures that would raise the state's lowest-in-the-nation cigarette tax. One bill would raise the 7-cent tax to 37 cents, bringing South Carolina in line with Georgia.

Another bill would use the proceeds to attract and retain nurses in the state to combat a perennial nursing shortage. Another would use the money to pay for smoking cessation and health care programs.

The tobacco tax hike should have occurred already. Last spring, lawmakers approved a 50-cent a pack increase, but it was vetoed by Gov. Mark Sanford, and the bill's sponsors could not come up with the two-thirds vote to override.

This session, an increase in the tax seems likely, although it might be less than 50 cents a pack and well below the national average of $1.19 a pack. It also seems likely that the money will be used to enhance health care in the state in some way, which is appropriate.

Any hike in the cigarette tax is welcome. Ample evidence shows that an increase in the price of cigarettes discourages teenagers from buying them and lowers the number of teens who become addicted to tobacco.

Here's hoping lawmakers take care of this unfinished business and pass legislation on these two issues.