Gov. Mark Sanford issued a veto Tuesday to a much-debated payday lending bill that various lawmakers had described as the most important issue to come before the General Assembly this year.
For two years, lawmakers wrangled in heated, emotional debate over the concept of placing greater restrictions on payday lenders, finally reaching a breakthrough on the last day of the 2009 General Assembly session.
Payday lenders, lawmakers and various consumer advocate groups finally came to terms on the legislation, marking the first new regulations to be put on the $155 million-a-year industry in South Carolina since its 1998 startup.
But Sanford said the new regulations violate his commitment to free market principles.
"There are a number of people who I admire tremendously who I know I will disappoint with this veto," Sanford wrote in a three-page letter explaining his decision, "but it is my hope that in time they see my consistency in pushing for limited government and maximized individual freedom. ..."
Sanford said South Carolinians should be free to make their own financial decisions. He also said he was concerned about the bill establishing a database that tracks loans compromising the privacy of borrowers.
As the payday lending debate raged in the General Assembly – amid a roughly $300,000 cash infusion to lobby lawmakers, their political action committees and other elected officials – Sanford was silent about the issue.
Sen. Joel Lourie, D-Richland, one of the key legislators who pushed for tighter regulations on payday lenders, said he was "very disappointed," but not surprised by Sanford's veto. And he criticized Sanford for also opposing federal stimulus money for education and vetoing an increase in the state's lowest-in-the-nation cigarette tax last year.
"His vision for South Carolina is for ineffective, underfunded schools, for kids buying cheap cigarettes and for unprotected consumers," Lourie said after the veto.
Sanford, he said, once again had put his personal agenda ahead of South Carolinians.
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