Recession, new rules may force payday lender to leave Va.

Virginia's modest clampdown on payday lending may claim its first big casualty.

Mason, Ohio-based Check 'n Go yesterday said that it could scale back or pull out of Virginia altogether because of pending restrictions and the recession.

Check 'n Go operates 68 money stores, employing about 100 people. The company has about 12 outlets in the Richmond area.

"Check 'n Go is evaluating economic conditions and legislative conditions, and considering all potential options," said spokesman Jeff Kursman.

He said the company, which paid Virginia regulators $100,000 to settle violations last year, will decide its next move here "in fairly short order."

The State Corporation Commission said it has heard nothing official from Check 'n Go. Employees at three Check 'n Go stores had no comment.

Shuttering stores could be costly, potentially saddling Check 'n Go with termination fees and other expenses for breaking leases on rental space.

Gov. Timothy M. Kaine is considering signing legislation by the 2009 General Assembly that blocks an end-run by Check 'n Go and other lenders on restrictions adopted last year.

More than three-quarters of the state's 800 cash parlors can bypass the $500 loan cap and accompanying limits on fees by offering open-ended loans that usually start at $750 and carry sky's-the-limit interest.

In September, the SCC authorized Check 'n Go to offer the pricier alternative to payday loans.

The measures before Kaine -- he could seek additional restrictions during the April session of the legislature -- ban lenders from simultaneously peddling payday and open-ended loans.

Further, the bills say that lenders who drop payday licenses to sell open-ended loans would be ineligible for a Virginia payday-loan permit for 10 years.

"We're considering the ramifications of the law as well as the current marketplace, and profitability and demand for our product in Virginia," Kursman said.

Contact Jeff E. Schapiro at (804) 649-6814 or .