Month: January 2004

“It gets a little crazy around this time,” says Alex Hawkins, a registered nurse, as he calmly uncradles the receiver. At 5pm on Monday, December 29, the clinic is about to open for the night. Hawkins fields calls from Charlottesville’s sick and uninsured, telling them that, unfortunately, tonight’s appointment schedule is booked solid. He adds names to the waiting list, informing callers their only hope of seeing a doctor is another patient’s cancellation.

Riiinnng—someone cancels an appointment, so Hawkins calls one of the 16 patients on Monday’s waiting list with some good news. A flu-stricken woman can see a doctor tonight. “The poor woman sounded terrible,” Hawkins says after hanging up the phone.

As the clock ticks closer to 5:15, the clinic’s official opening time, executive director Erika Viccellio is also scrambling for the phones. Only two of the night’s six scheduled doctors have shown up, and some of the 23 volunteers are also missing. It’s the holidays, Viccellio says, so volunteers are hard to come by. “What am I going to do, scold them?” Viccellio asks. “I’m just thankful they’re here.”

A female patient shows up at the front desk and tells volunteer Tony LeVere, “No hablo Ingles.” Now another volunteer is needed—a Spanish translator.

“We’ve had a significant increase in the number of our Spanish-speaking patients,” says Viccellio. “But finding Spanish speakers to help us translate is really tough.”

Volunteer coordinator Laura Young calls her husband, Ken, who learned Spanish as a child from his Mexican nanny, to come to the clinic and translate. “He’s married to the volunteer coordinator, so he’s always on call,” Young jokes.

This all-hands-on-deck mentality is business as usual at the Charlottesville Free Clinic, which shares offices with the local Virginia Health Department on Rose Hill Drive. On Monday, Tuesday and Thursday nights from 5:15 to 8:30pm, the clinic offers no-cost doctor appointments and free prescriptions for people who’ve fallen through the health care system’s widening gaps.

To qualify for a free clinic visit, patients (or a member of their household) must have a job, but no health insurance. Either their jobs don’t provide medical benefits, or they earn too much to qualify for Medicaid and other indigent care programs, but too little to pay for their own coverage.

Founded in 1992, the Charlottesville Free Clinic was started to save people with minor illnesses and no insurance a trip to the emergency room. In time it has evolved to become the only option for the working poor with chronic illnesses.

“Our motto was ‘Health care for people outside the system,’” says Dr. Mohan Nadkarni, who co-founded the clinic. “What’s happened since then, for better or worse, is that we’ve become part of the system.”

 

In the early 1990s, Nadkarni and Paul Demarco, both medical residents at UVA at the time, decided they were seeing too many patients ravaged by the later stages of diseases like cancer or diabetes. These people could have been spared a lot of suffering, Nadkarni thought, if they had been able to see a doctor earlier.

The problem was health insurance. Without it, Nadkarni says, people got by without care until they became extremely sick. Then they checked themselves into the emergency room, which by law cannot turn patients away for financial reasons.

The two doctors decided to start a free clinic, and the idea almost immediately became something of a local cause celebre. Nadkarni and Demarco (who now practices in rural South Carolina) met with local lawyer Leigh Middleditch, who helped the doctors assemble an all-star community advisory board with well-connected leaders like minister Rev. Alvin Edwards, Gordon Walker, head of the Jefferson Area Board for Aging, Albemarle County Supervisor David Bowerman and City Sheriff Cornelia Johnson.

When the clinic opened in 1992, it had $75,000. Today, the free clinic’s donor list takes up nine pages in its 2003 annual report and reads like a Who’s Who of Central Virginia. Last year, 42 percent of the clinic’s $483,453 budget came from donations by private individuals. Now, it has about 150 volunteer doctors, nurses, dentists and pharmacists and about 300 lay volunteers. Ten years ago, however, Nadkarni thought the clinic would soon be obsolete.

“The Clinton health care reform plan was being debated. We were hoping there would soon be some form of national health insurance. One of our goals was to be out of business,” Nadkarni says.

Since then, however, the political pendulum has swung away from health care reform. Now the ranks of the uninsured are growing—in more ways than one.

First, the number of people without health insurance is rising. In 2002, the percentage of uninsured Americans rose to 15.2 percent of the population—about 43.6 million people—from 14.6 percent in 2001. The U.S. Census Bureau attributes the decline in coverage to the erosion in private insurance coverage, driven by a weak economy, rising unemployment and increasing health care costs.

The Charlottesville Free Clinic reports that about 1.5 million Virginians—25 percent of the Commonwealth—went without health insurance during all or part of 2002. Virginia attempts to serve its uninsured population through the Federal Medicaid program, which covers about 700,000 low-income people who are elderly, disabled, pregnant or minors, at an annual cost of to the State of $3.75 billion. A program called Family Access to Medical Insurance Security (FAMIS) gives benefits to an additional 50,000 Virginia children.

These programs don’t cover everyone, especially not in Virginia, which spends about $1.5 billion a year less on Medicaid than other states its size. The Commonwealth ranks 43rd among all states in percentage of budget devoted to Medicaid programs.

Given these trends, the Charlottesville Free Clinic has seen the need for its services expand. The clinic booked 3,244 appointments in 2003, up from 2,570 in 2000. Using statistics from the Chamber of Commerce, Viccellio estimates there are between 8,500 and 10,000 people in Charlottesville who qualify for treatment at the free clinic—that is, people who have jobs but do not have health insurance.

“Most of our advertising is word of mouth,” Viccellio says. She says the clinic is working on a plan to recruit more doctors, to be followed by a plan to recruit more patients. “Right now, we’re able to get people an appointment within the week they call, and there’s never a night when we haven’t filled every single appointment,” Viccellio says. “If we get a lot more patients without more doctors, we’d be in a bind.”

When she took the job as executive director in May 2003, Viccellio was a veteran of the nonprofit world but lacked medical experience. She said she was shocked by how many people don’t have access to basic health care.

“It’s great we can be here, but we shouldn’t need to be. It’s sad we’re such a vital part of our health care system,” Viccellio says.

 

America’s uninsured population is growing in another way—girth. About one in five adults in Virginia is obese—twice as many as 10 years ago, according to the Centers for Disease Control. That number is likely to swell in the near future. Last year, the Virginia Health Department’s Childhood Obesity Task Force estimated that nearly 42 percent of public school third-graders in Charlottesville were either obese or significantly overweight.

The national obesity epidemic has changed the clinic’s mission in recent years, as doctors diagnose more patients with fat-related problems such as diabetes, heart disease, high blood pressure and high cholesterol. These conditions require long-term care and expensive medication that can tax any clinic’s resources. Charlottesville’s clinic is in better shape—in terms of both volunteers and donations—than many of the other 48 free clinics in the State.

“We have two great community hospitals here,” Viccellio says. “That gives us access to doctors that other communities don’t have, and we have a community that is willing to support us.”

Yet the increase in patients with chronic disease is forcing the clinic to make a trade-off, Nadkarni says: “One of our ongoing concerns is how we balance between acute visits and chronic illness.”

Viccellio estimates that between 60 percent and 70 percent of the clinic’s patients require long-term care, mostly for chronic diseases related to obesity. Indeed, on this Monday, 10 of the 31 patients on the schedule need treatment for one of these conditions, and the waiting room looks like a Weight Watchers meeting.

“It’s not even diabetes night,” says Hawkins. Once a month, he says, doctors from UVA’s endocrinology department visit the clinic to meet the growing diabetes demand.

The obesity epidemic also weighs heavily on the clinic’s pharmacy—one of only 17 licensed pharmacies among Virginia free clinics. Pat Tiedeman, a pharmacist who started working at the clinic shortly after its founding, says drugs and equipment like syringes that monitor and treat diabetes can cost thousands of dollars a year, and one diabetes patient can require eight to 10 prescriptions at a time.

While the number of patients at the clinic remains about the same from year to year, the number of appointments has gone up recently, and the number of prescriptions filled has skyrocketed [see chart]. Last year, the pharmacy accounted for about $166,941, or about 38 percent, of the clinic’s expenses.

On this particular evening, the pharmacy opened at 7pm. The demand for free medicine is evidenced by the line stretching from the pharmacy’s counter, through the waiting room and past the front desk. One young woman, who began visiting the clinic last year after she was laid off, is irritated to hear that she would have to wait another 30 minutes for her prescription. She takes the news without argument, unlike another client, who registers her complaint with Young. She manages her discontent.

“When a patient is angry, I can’t say ‘Wait, let me go get someone else,’” says Young. “I’ve been yelled at, almost physically assaulted. I had to get some attitude.”

Even though treating diabetes puts a strain on the clinic, Tiedeman and other volunteers argue that such care is a vital service.

“These people are all around us,” Tiedeman says. “And as a community, we want to help them. If you are a diabetic and you come to us, you get extremely good care. We keep a lot of people out of the hospital.”

 

As far as David Brinton is concerned, the Charlottesville Free Clinic didn’t keep him out of a hospital, they kept him out of a coffin. “The Free Clinic saved my life,” he says.

The 49-year-old moved to Charlottesville in 2000 after getting laid off from his job in Harrisburg, Pennsylvania. “Downsizing,” he says, with no small trace of bitterness.

On this Monday night, he sits in one of the clinic’s six examination rooms, on a brown patient bed with a yellowed pillow, covered by a strip of tissue paper. The smiling visages of Julia Roberts and Uma Thurman gleam from the magazine covers stacked on a nearby file cabinet. Besides a picture of Monticello, the dominant decor in the room consists of posters warning against sexually transmitted diseases. “First love? Not quite,” cautions one poster depicting a human pyramid that suggests your partner may not be so virginal.

Now Brinton works nights repairing audio-visual equipment for UVA. While his job is a full-time position, it does not include health insurance. If not for the free clinic, he says he probably wouldn’t have seen a doctor for the foot problem that prompted him to visit the clinic three years ago. He’s glad he came.

During the routine screening, a clinic nurse noticed that something was wrong with Brinton’s blood pressure. A doctor sent Brinton to a cardiologist who works for the clinic gratis, and the cardiologist confirmed that one of the valves on his heart had a very bad leak. A year and a half ago, a surgeon replaced Brinton’s faulty valve with a plastic one.

“I remember I was huffing and puffing just climbing a flight of stairs. I figured I was out of shape. I smoked. I was overweight. I never thought there would be something wrong with my heart,” he says.

Without the Charlottesville Free Clinic, Brinton says he could not have afforded the medical treatment. Even now, he is making monthly payments on $5,000 for other doctor bills.

Now Brinton is one of the clinic’s chronic patients, making appointments about every two months so the doctors can monitor his blood. On Monday, he tells Dr. Bob Kayser that when he eats pancakes for breakfast, he feels weak and shaky a few hours later. Kayser recommends Brinton try eating the pancakes without syrup, to see if that makes a difference.

“My first 49 years haven’t been too bad,” Brinton says. “I’d like to be around for another 40 or 50, now that I’ve got me a good woman.”

By about 8pm on Monday night, the clinic is winding down. Melissa Weimer, stethoscope slung around her neck, slumps in a plastic chair near a table of fried chicken, green beans and potato salad donated by Wayside Takeout & Catering, which, like other local restaurants, provides free food for clinic volunteers. Many volunteers leave day jobs to start work when the clinic opens at 5pm and don’t leave until 9pm.

Dr. Nadkarni still extends his workday by volunteering. After a day at UVA’s Medical Center navigating the bureaucratic byways of insurance companies, he says working at the clinic can actually be relaxing.

“It’s very refreshing. There’s much less paperwork, we’re not dealing with billing and insurance,” Nadkarni says. “The patients are very grateful. It feels like you’re providing a valuable service without all the red tape. It gets back to the reason we all got into medicine in the first place.”

This sense of purpose drives the 24-year-old Weimer, who now studies osteopathic medicine in Blacksburg, to return to the clinic as a volunteer when she’s home from school on Christmas break. She graduated from UVA in 2001 and for two years worked as the clinic’s patient-care coordinator, as well as in the pharmacy.

“I volunteer to feel like I have a purpose. In medical school you tend to lose that,” she says. “At the clinic you get to develop the relationship part of medicine, which is mostly what being a doctor is all about.”

Not all volunteers have a career in medicine, however.

“It’s interesting to meet the people,” says Dan Devereux, a philosophy professor at UVA. One of his favorite jobs, he says, is conducting the exit interviews to get feedback from patients after their clinic appointment.

“You find out how diverse the population is around here. I’ve interviewed patients from Tibet, Russia, Afghanistan and from countries in Africa. We get a lot of waiters and waitresses, and people who do artistic things,” says Devereux.

The interviews mean the free clinic has comprehensive statistics on its patients. More than 40 percent of the patients are between ages 41 and 64. Most are white, and 60 percent are women. About 80 percent live in Charlottesville and Albemarle. More than 70 percent have only a high school diploma, 66 percent are employed full time and about 25 percent say that without the free clinic, they wouldn’t have seen a doctor at all.

Like many of the other volunteers, Weimer speaks with conviction that quality health care is a right, not a luxury. She says the volunteering gave her the chance to see behind the science of medicine to the social impact of health care policy. Weimer says she has seen how cycles of poverty contribute to chronic health problems, ensuring that, despite its goal of going out of business, the Charlottesville Free Clinic will remain a key part of local medicine.

“It’s not just that people don’t have health insurance,” Weimer says. “They don’t have transportation to get to the clinic, they don’t have child care, they don’t have a safe place to come home to. They may not even know what it’s like to lead a healthy lifestyle.”

With the holidays approaching, William was short on cash. This was not a seasonal problem for the 45-year-old Scottsville resident, who moved to the area from another state about one year ago. Though William has a job, he says it pays less than the one he previously held. The smaller paychecks have been rough for him, but he deliberately avoids credit cards to help him ride out budget crunches.

“Credit cards get you in trouble,” he explains.

So instead, as he’s done several times during the past year, William walked into the Checks Cashed in the Cherry Avenue Shopping Center, one of six payday loan stores in the Charlottesville area. After a simple process in which William signed and left behind a check for money he didn’t have, he walked out with $250 in cash.

On a cold Thursday night some time later, William walked back into the bright, neon-adorned office of Checks Cashed. This time, he was holding $287 in cash, the required amount to cover his check. The extra $37 was the fee for his $250 loan.

The payday loan business is a numbers game. And when the math is done, it’s clear that the house always wins. The scheme is called a “payday loan” because a borrower is supposedly getting a cash advance on his next paycheck. The practice is also referred to as a cash advance or check advance.

To get a payday loan, the borrower first must prove he has a job and an active bank account. Then, he writes the lender a check for the amount of the desired loan, which is given to him in cash. No credit check is run during the process—a huge enticement for many people. The payday lender agrees not to cash the check, but keeps it as collateral until the loan and a fee are repaid.

The fee on William’s loan was based on the standard $15 per $100 loan in Virginia, which is the maximum fee payday lenders can charge in the State. The minimum time period for repaying the loans is seven days. If William repaid his loan in a week, the annual interest rate would amount to a whopping 782 percent. If he waited 30 days, it would be 183 percent. Should he not repay the loan in time, he could be sued.

Despite the steep cost of his loan, William isn’t complaining. He’s embarrassed that he has had to resort to payday loans, refusing to give his full name to this reporter, but he defends the service.

“It’s come in handy,” William says.

He says his cash flow problems are temporary. “Eventually, I won’t need it,” William says of payday loans.

But his optimism seems unfounded. William admits to getting a payday loan at least every two months. He’s obviously cash strapped, and the mounting fees must worsen his financial headaches. Yet William claims he’ll be able to escape the grasp of payday loans and fees. “I will. That’s no problem,” he asserts.

 

According to Jay Speer, a Richmond- based staff attorney for the Legal Aid Justice Center, payday loan fees force many customers like William into such a deep financial hole that they end up taking loans from one payday lender to repay the loans and fees from another. Getting a loan rolled-over or extended is illegal in Virginia, but Speer says some people bring in cash to settle an old loan, and immediately write a check to take out a new one from the same payday loan store.

“I think most people think it’s a one-time thing. They have no idea that they’re getting sucked into a long-term relationship,” Speer says. “Once they get you, it’s very hard to get out.”

A report from the Virginia Bureau of Financial Institutions supports Speer’s claim. In the first six months after payday loans became legal in the State, the typical borrower took out almost five payday loans—an average of a loan every five to six weeks.

“There’s no real way to address that at this point,” says Susan Hancock, the deputy commissioner of the Virginia Bureau of Financial Institutions, of repeat payday loan customers and the “vicious cycle” of going to one payday loan office to pay off a previous loan.

Consumer advocates say the payday lending industry relies on this repeat business, and preys on lower-income and minority families, as well as on military personnel.

“Visits to payday lending stores—which open their doors in low-income neighborhoods at a rate equal to Starbucks opening in affluent ones—are threatening the livelihoods of hardworking families and stripping equity from entire communities,” said Julian Bond, chairman of the NAACP and UVA history professor, in a recent news release.

The six payday loan centers in the Charlottesville area are located on: Cherry Avenue, which is in a lower-income, predominately black neighborhood; in the Rio Hill Center—the County’s bargain shopping district; on Carlton Road in blue-collar Belmont; in the shopping development that serves as a margin between the City and University and sits across Emmet street from the Barracks Road Shopping Center; on Seminole Trail across from Lowe’s; and near the ABC store and Burger King in Ruckersville.

According to a recent report by the North Carolina-based Center for Responsible Lending, which has long been a thorn in the side of the payday-lending industry, 91 percent of payday loans are made to people who take out five or more payday loans per year. The report estimates that these people, whom the consumer group labels as being caught in a “debt trap,” shell out $3.4 billion in fees each year.

But while critics deride payday loan centers as “legal loan sharks” who drag lower-income families into a nightmarish pyramid of growing loans and fees, the payday industry paints a far different picture, claiming the service helps people avert a cash emergency. Proponents also argue that payday loans help working families rather than prey on the poor, and cite a Georgetown University study that found roughly half the industry’s customers have a household income of more than $35,000 per year. Payday lending representatives claim their loans help a working family make ends meet when the car’s transmission goes or when junior needs that saxophone.

“I really think that this industry is a classic example of the marketplace making a need that somebody or someone fills,” says Vicki Woodward, a vice-president for Advance America, a leading national chain of payday lenders, which has a store in the Rio Hill Center.

Woodward, who also serves as the spokesperson for the Community Financial Services Association of America, the trade group that represents most of the payday loan industry, says her industry has “concern for customers who have become overreliant” on payday loans. She says payday lenders must provide explicit descriptions of the costs and responsibilities of their loans, and that the process is designed to “give pause” to borrowers.

But this cautious atmosphere is nowhere to be seen in the ubiquitous advertisements for payday loans, which are peppered with pictures of gleeful customers holding fistfuls of cash and slogans like “quick, easy and hassle free!”

Woodward says payday lenders fill a void left by banks, which have mostly stopped offering small loans in recent years. She also cites growing charges for bounced checks, ATM machine usage and credit card late fees as reasons for growth in the payday loan industry.

“There’s not many places to turn for this,” Woodward says of people in need of a small loan. “The vast majority of customers use payday advance properly, and what we could call moderately.”

Woodward says payday borrowers appreciate the service, and the industry claims a low number of customer complaints. State authorities back up this assertion.

“Relative to the number of transactions, the complaints have not been bad,” says Deputy Commissioner Hancock.

 

While consumer advocates vigorously dispute the payday loan industry’s claim of providing a helpful service to its consumers, both sides agree that banks are responsible for the emergence of payday loans.

“[Banks] are not providing adequate, fairly priced loans to consumers, which means the predatory payday lenders can flourish,” says Ed Mierzwinski, the consumer program director at the U.S. Public Interest Research Group, in an e-mail.

A wave of bank consolidations and mergers followed the major banking deregulation of the ’80s and early ’90s. A profusion of new bank fees followed, and small loans became tougher to find. For instance, SunTrust doesn’t offer loans under $3,000. Virginia National Bank will give loans to certain customers, but not for any amount under $500. Both banks do, however, feature overdraft protection, which could take the place of a payday loan for cash-strapped consumers. With overdraft protection, a bank offers credit to cover an overdrawn account—for a fee and/or interest. For VNB, overdraft money includes a 15.5 percent annual interest rate. The SunTrust overdraft option tacks on a $10 fee for every $100 borrowed.

Though not cheap, overdraft and other conventional banking solutions—with the exception of bounced checks—are generally cheaper than payday loans. But with fees rising for ATM transfers and even balance inquiries, people are increasingly looking toward the bright lights of payday loan stores. Since payday lenders first hit the scene in the early ’90s, the industry has exploded. At the beginning of 2003, more than 15,000 payday loan stores were operating around the country—a 50 percent increase in only two years. Payday lenders make $25 billion in loans each year to roughly 12 million households, according to industry estimates.

Payday lending came quickly to Virginia, sometime in the early ’90s, when check-cashing stores in the Tidewater region began giving unlicensed small loans, according to Jean Ann Fox, Yorktown-based director of consumer protection for the Consumer Federation of America. Though check cashing and payday loans often go together, and can sometimes be found under the same roof, they deal with a different clientele. Payday borrowers have jobs and checking accounts while checks cashed customers are often of the “unbanked” variety.

After a contentious debate, in 2002 the Virginia Legislature passed the rules for payday loans. Prior to this, a few payday loan stores had been operating in the State by partnering with national banks and thus avoiding Virginia regulation and the 36 percent cap on small loans.

State Senator Creigh Deeds, who represents the Charlottesville area, voted for the payday lending measure, though he says he thought long and hard about it.

“In an ideal world I would say payday lending would not be necessary,” Deeds says. But he says people need short-term loans, and that the market for payday lending was there.

“It wasn’t like we could make this industry go away,” Deeds says, adding that the final legislation was an attempt to “make some lemonade—even though it’s sour—out of lemons.”

The legislation went into effect on July 1, 2002, opening the door to payday lenders in the midst of a major economic downturn—the perfect market for payday lenders. Six months after the legislation went into effect, the state had 377 payday loan locations, and $165 million had been loaned out. Hancock says that since then the total number of locations in Virginia has grown to 623, with more licenses still pending.

While the payday loan industry’s trade group speaks of helping Americans get over a financial hump, the less sophisticated side of the business makes it clear that payday loans are indeed about wads of cash. “And the best part of all, most of your customers are repeat customers!” breathlessly exclaims the Web site cashnow.com. “Repeat Customers = Residual Income.” Another site also aimed at would-be lenders estimates that the average payday loan location clears $25,875 per month in loan fees.

But their loans are not usury, say industry representatives. Indeed, both the payday loan industry and its critics offer many statistics to compare its pricing to other forms of borrowing money [see sidebar].

For example, industry critics PIRG and the Consumer Federation of America issued a report showing that payday loans are far more expensive than credit cards. Calculated with fairly standard interest rates and fees, the report claims that the finance charge on a $200 credit card cash advance that is repaid in one month would be $8.41—a yearly interest rate of 50.46 percent. At the rates available in Virginia, a $200 payday loan would include a fee of $30. The annual interest on the loan would be 183 percent.

“Credit cards are expensive, but they’re still cheaper than a payday loan,” says Jean Ann Fox of the Consumer Federation of America.

Not always, says Woodward of the industry group. Slinging her own math, Woodward argues that the credit card fees for a late minimum payment could be $27 for a $100 credit card balance, which could trump the payday loan fee. Woodward also cites overdraft protection fees, bounced check fees from banks and merchants, utility bill late fees and even ATM charges, all of which can charge more interest than the typical payday loan in Virginia.

Though Woodward concedes that payday advances are not always the best option, she says they are always cheaper than a bounced check, the average fee for which is $25 per check, and merchants often charge their own fees in addition to the bank.

“It’s just like any other product, you have to weigh it against other alternatives,” Woodward says.

 

William chose to drop $37 at the loan center on Cherry Avenue instead of putting the $250 on a credit card and slowly chipping away at the credit. Why?

William says he has experienced more than his share of credit card debt woes in the past. For him, a quick payday loan was a simpler option than dealing with credit cards.

Fox says this is a common sentiment among the payday loan set. Some people are in deep with credit cards or don’t even have a card. Others have a bad credit rating. Perhaps most importantly, the ads for “cash now!” make payday loans seem so easy. With no nagging bills and no credit check, it’s over and done in minutes.

“It’s quick and it’s easy and it’s fast, and they have neon signs,” Fox says. “Who wouldn’t want to be able to write checks when they don’t have money in the bank?”

In essence, payday loans have become the fast food of the banking industry—an analogy that is bolstered by the profusion of payday loan stores. “It’s worse than 7-Eleven,” Fox says of the hundreds of payday loan centers now sprinkled around Virginia.

And it’s an industry that’s likely here to stay.

“Once you get the industry established in the state, it’s much harder to repeal it,” Fox says. “This industry is very generous, and they are big campaign contributors.”

For example, a recent Toledo Blade investigation found that Advance America, the nation’s largest payday loan chain and the company Woodward works for, hosted a fundraiser for Ohio Congressman Mike Oxley, who chairs the committee that oversees the industry. Advance America’s troops, the masters of quick cash, made sure that Oxley walked away with $42,000 in campaign donations from that single event.

Critics of the industry have pushed to subject payday loans to the 36 percent annual interest rate banks are limited to for small loans. They have also championed state-run databases like the one in Florida that identifies people who are stuck in a payday-loan debt cycle. Fox and other consumer advocates also suggest legislating a “cooling-off” period between payday loans for borrowers.

Woodward says the industry would oppose these reforms, and that the true goal of payday lending critics isn’t to protect consumers but to abolish the business altogether. As evidence, she says a 36 percent interest rate cap imposed on banks would be unworkable for payday lenders. And the industry claims that overheads and financial risks taken by short-term loan centers justify the steep fees.

“Frankly, they know that a company cannot make a loan for 10 cents a day,” Woodward says, citing the amount a payday lender could charge for $100 loan at the 36 percent rate. Furthermore, Woodward stresses the need to protect the right to small loans for customers who are “overwhelmingly satisfied with this product.”

When Governor Mark Warner signed the payday lender bill into law, he indicated that it was an issue that might warrant revisiting. And Sen. Deeds says he “has an open mind” about possible legislative protections for payday borrowers.

But as payday loan centers keep sprouting up in the State, and the industry continues to gain clout, slapping new regulations on the practice will not be easy. Some states have banned payday lenders outright. North Carolina flip-flopped, legalizing and later outlawing payday lending.

“A state can change its mind. It’s tough, but you can do it,” Fox says.

Ultimately, any attempt Virginia might make to crack down on payday loans will be hamstrung by the appeal of fast cash and the slippery world of the Internet. A two-second Web search turns up a ridiculous number of Internet-based payday lenders, some of which promise approval in 30 seconds and a transfer of funds within 24 hours. But the fees for Internet payday loans are sometimes double the Virginia rate.

With such hefty fees, there are few scenarios in which a payday loan makes any financial sense. Yet it seems only strong national legislation could successfully stamp out the fringe banking industry of payday lending. With legislators like Rep. Mike Oxley at the helm in Washington, buyer beware will continue be the governing principle behind the fast cash of payday loans.

Q: Ace, now that the holiday shopping season is over, everywhere I look there are huge sales going on at all the big stores. What gives? I know this happens in the retail industry every year at this time, but I don’t know why. Why?—Bill Sayles

A: As you noted, Bill, with the last week of December/first week of January come a buffet of deep discounts from retailers nationwide. That’s good for those who got cash for Christmas or gift cards for Hanukkah. But bad for everybody else who paid full price for holiday gifts a few weeks earlier only to see them now sitting on the shelves at, oh, 50 percent off.

What’s with the timing? Ace always supposed it was simply a matter of stores trying to move their overstock from the holidays. That’s partially true. But he put in some calls to a few local shops with big sales going on the past couple weeks and found some other, surprising reasons.

Men’s clothing store Beecroft & Bull (where Ace has spent many an afternoon pawing at the beautiful silk suits behind the window glass of the Barracks Road shop) started its annual post-holiday sale January 2. Manager Bill Jordan told Ace that the timing is, like their clothes, based on tradition.

“We only have two sales a year—one after Christmas, one around July 4,” he says, which is the way things used to be done before the spread of big-box and chain stores that seemingly have sales every other week. As for the January/July positioning, “They’re seasonal breaks,” he says. “In January we’re beginning to get spring and summer merchandise, while in and around July we get fall and winter merchandise.”

Corner-based footwear store Ragged Mountain Running Shop has actually been holding its sale through the month of December, but gives it an added post-holiday push to take advantage of a more shopper-friendly, student-free atmosphere.

Owner Mark Lorenzoni says Ragged Mountain is an exception to the retail world—their sales slow during the holiday season since there’s little outdoor activity then—but guesses that most retailers do the discount thing now to dump leftover inventory, on which they would otherwise have to pay taxes.

“They know people’s shopping habits slow down [after Christmas] and they have to move it” before their fiscal year is up, he says. Sometimes that’s in June, other times it’s the end of the calendar year. Lorenzoni says he sees this with the shoe companies he works with. “They’re trying to get rid of their shoes now. Maybe that’s what it is.”

Kelly Gentry, who co-owns Second Street antique store 2 French Hens with partner Miles Andrews, says, “Retailers have to make a living the best way they know how.” Her store held a sale immediately before Christmas, with larger savings after the holidays.

“A lot of people don’t understand the dynamics of retailers having to buy merchandise,” Gentry says. “A lot of people just truly think we have a little Wal-Martism about us, where we’re just going to capitalize.” In other words, retailers are not simply trying to wring every last dollar out of desperate holiday shoppers before offering seasonal discounts, and appearances to the contrary can be deceiving. But take it from inveterate shopper Ace. One thing that’s always true is this: A good sale is hard to pass up.