Payday Loans

Corporate front group Stand Up Missouri had an astro turf "rally" Wednesday in Jefferson City. The keynote speaker for the event was Missouri State Represenative Don Wells (R- Kwik Kash). His Pro-Payday Loan Industry speech mostly equated the highlights of legal loan sharking to tired empty sound bites such as "free enterprise", "small business", and emboldening references to the Declaration of Independence. The crowd wore matching blue Stand Up Missouri hats and jackets. Paid for with money sucked out of our local economy by out-of-state bankers no doubt.

Excerpt from his speech:
 

For those new to the issue:

Missourians for Responsible Lending is a real deal grassroots campaign to reform the Payday Loan Industry and limit the APR to 36%, down from the current 1900%.

The out-of-state bankers and lawyers that make up corporate opposition groups Missourians for Equal Credit Opportunity and Stand Up Missouri have been bringing out all the stops as they realize they're about to be reined in.

The most recent bit of trickery the loan sharks have practiced is writing up two new ballot initiatives themselves, that also "reform" Payday Loans. Here's exerpts from the St. Louis Beacon's article.

In today's Post-Dispatch: 

Last year, after yet another Missouri legislative session came and went without decreasing the interest rates that payday loan companies can charge their clients, a group of religious and civic organizations filed a state ballot initiative to bring sanity to the marketplace.

Missouri is one of the nation's most powerful magnets for payday loan companies. Its notoriously weak laws allow profiteers to prey on the working poor by charging effective annual interest rates of up 1,980 percent.

The payday loan companies and their cousins in the consumer credit industry want to keep that gravy train running on time.

They've created two campaign committees with hundreds of thousands of dollars — most of it given secretly — to fight off a ballot measure that is nearly identical to the one Congress passed to limit the ability of payday loan companies to bankrupt our nation's servicemen and women.

This is a warning from August, but it shows what an agency dedicated to alerting consumers about the pitfalls of certain businesses thinks about payday loans.

Read their take here: 

“Bottom line, virtually unrestricted payday lending does excessive harm. Whether or not payday loans are restricted, delegitimized or legally vindicated, it's a bad idea to get a payday loan. They almost guarantee financial hardship and have little-to-no benefit for the borrower--even short term.”

Speaker of the House Steven Tilley received nearly $7,000 from Advance America and the Republican’s senate campaign arm received around $5,200 from the same company.

Advance America is a payday loan company based out of South Carolina. This brings Steve Tilley’s payday loan company haul up to $15,560 for the week. Not bad for simply defending 1,950 percent APR.

Missouri Speaker of the House Steve Tilley received over $8,600 from payday loan company QC Holdings Inc. yesterday.

A few weeks ago, QC Holdings employee John Prentzler filed a lawsuit against the initiative petition that would lower the APR limit for payday loans from 1,950 percent to 36 percent. 

Midwest Voices details the services rendered by Jeff Roe's Axiom Strategies in defense of 1,950 percent  APR on payday loans.

Last week it paid $86,000 to Axiom Strategies, the company owed by Kansas City campaign guru Jeff Roe, for duties such as strategic campaign oversight ($15,000); strategic communications ($16,000); regional operations management ($25,000); and Website design ($9,500).

Earlier this year, the payday loan industry founded a political action committee called Missourians for Equal Credit Opportunity. Records filed with the Missouri Ethics Commission show the committee was terminated last week, and a balance of $107,000 was transferred to a campaign committee of the same name.

Payday Lenders aren’t messing around when it comes to the consultants and lawyers they have lined up to help them push back against efforts to cap loan interest rates. 

Todd Graves, former U.S. Attorney and brother of Congressman Sam Graves, is representing John Prentzler, a QC Holdings employee, in his suit challenging the summary language and fiscal note for the petition seeking to cap the interest rate on loans.

Also, the payday lending front group Missourians for Equal Credit Opportunity (MECO) lists Chuck Hatfield as a contact. Hatfield is a former Chief of Staff in the Missouri Attorney General’s office and does lots of work on ballot initiatives.

In addition, MECO received $200,000 from Missourians for Responsible Government, which shares a post office box with Patrick Tuohey’s Missouri Record.

Finally, James C. Thomas is listed as the Treasurer. A James C. Thomas has worked with Jeff Roe-connected front groups in the past.

Smart money says this is only a partial list of the people they have to defend their ability to charge high interest rates on payday loans.

Yesterday, Missourians for Equal Credit Opportunity filed a lawsuit challenging the initiative petition filed by Missourians for Responsible Lending which seeks to cap the rate on predatory loans. They are challenging the official ballot title approved by the Secretary of State. Both the Secretary of State and State Auditor are listed as defendants in the case.

Once again, the Industry proves it has no friends. The plaintiff, John Prentzler, is identified only as a citizen in the press release, but is actually the Director of Automotive Operations at QC Holdings – one of the biggest payday lenders in the nation. This isn't surprising; last year in a series of public field hearings on payday lending reform, the only people who spoke in favor of the Industry were industry employees.

Miss Liberty wonders: Just who are Missourians for Equal Credit Opportunity? James C. Thomas III, a KC lawyer is their treasurer. They reported today, under the 48 hour reporting rule, a donation of $200,000 from Missourians for Responsible Government. But which Missourians for Responsible Goverment?

Good news: "A House-approved payday lending bill is dead for this year, but two senators — one Republican and one Democrat — say they plan to write a much tougher measure in time for next year’s session."

The Post-Dispatch reminds Republicans in the General Assembly that the payday lending reforms proposed by Rep. Mary Still (D-Columbia) and others are patterned after federal legislation credited to Sen. Jim Talent that "limited the financial damage payday-loan companies can inflict on military families."

PAYDAY LOAN HYPOCRISY: MISSOURI GOP FORGETS EXAMPLE SET BY JIM TALENT

...The debate about payday loans shouldn’t be about politics; it should be about fairness and justice.

And that’s why we bring Mr. Talent into the debate. We could bring in former Gov. Matt Blunt, the Republican who sought to remove payday-loan facilities from nursing homes. Or U.S. Rep. Sam Graves, the uber-conservative congressman from Tarkio who sponsored a measure similar to Mr. Talent’s.

The Missouri House approved legislation today handled by Reps. Ellen Brandom (R-Lobbyists) and Don Wells (R-Kwik Kash) by a 99-57 vote today.  The Democratic caucus stood together against the sham bill, and even had the support of several Republicans: Paul Fitzwater, Lindell Shumake and Nick Marshall.

The Star's Barb Shelly sums up the proposal here:

As written, it does almost nothing to diminish Missouri’s status as one of the nation’s most friendly states for payday lenders.

It lowers the cap on the annual percentage rate on a loan to 1,564 from 1,950 — a meaningless dip because the average short-term borrower in Missouri now pays an annual percentage rate of 444 percent. And at 1,564 Missouri’s APR would remain the nation’s highest.

"It's an open secret throughout the state that this is a joke...It’s an open secret throughout the state that this is not real reform."

Rep. Jake Zimmerman (R-St. Louis County) on the payday lending legislation pushed by Reps. Don Wells (R-Kwik Kash), Ellen Brandom (R-Sikeston) and the payday loan industry

It's pretty hard to stand up on the House floor and defend 1564% APR, but Representatives Don Wells (R-Kwik Kash) and Ellen Brandom (R-Sikeston) did a pretty good job yesterday. They were able to extol the necessity for and the virtue of the sharks in the water of the short term loan. Sandy "I'm a Banker" Crawford (R-Buffalo) said she felt a lot better about payday loans after the March hearing before Financial Institutions. Was it the slick lobbyist, the paid UMKC kU hack economist, or Mr. QC Holdings himself who convinced her that predatory lending is indeed a service all states should want? Maybe it was the expensive shoes, the odd razor haircuts, or the genial repartee that identified the lender as the benevolent banker and stellar community member who is just helping friends and neighbors through a temporary time of need. In order to appear as a serious and respected policy expert, Mr. QC was allowed to testify for informational purposes, not as an advocate, adding a new tool for the promotion of self interest.

Debate became contentious Tuesday afternoon as the bill's detractors explained the "reform" offered by HB656. The truth about the bill was just too much for Speaker Pro Tem Shane Schoeller, and he gaveled the end of debate without a vote. Are there some defenders of the liberty to charge what you want who don't want to go on record supporting such egregious rates? Miss Liberty knows the Industry will decide if a vote is taken.

This weekend in the Post-Dispatch:

Under the guise of “reform,” the Missouri House of Representatives has advanced a bill that actually would loosen restrictions on the payday loan industry. That’s pretty galling, given that Missouri already is one of the friendliest states in the union for short-term lending sharks.

In playing footsie with the payday lending industry — which contributes hundreds of thousands of dollars to their campaigns — Missouri lawmakers are bucking a trend in which 17 other states have cracked down on the industry. Included are the rock-ribbed Republican states of Arizona and Montana...

The [House Financial Institutions Committee] vote in favor of the bill [Ellen Brandom's HB656] was 13-3. Among those voting aye was the committee chairman, Republican Don Wells of Cabool, who recently sold his interest in Qwik-Cash of Cabool.

Area Republicans joining Mr. Wells were Scott Dieckhaus of Washington and Vicki Schneider of O’Fallon. Proving that predation knows no party, two area Democrats also voted aye: Jamilah Nasheed of St. Louis and Mary Nichols of Maryland Heights.

They should all be ashamed.

In this weekend's Capitol Watch editorial:

You call this reform?

A bill ostensibly curbing payday lending practices in Missouri finally made it out of a legislative committee. Unfortunately, it’s about as effective as fighting a brush fire with a shot glass.

Rep. Ellen Brandom’s bill, which has cleared the House Financial Institutions Committee, is a short-term lender’s dream. It caps the annual percentage rate on a loan at a mere 1,564 percent, down from the current cap of 1,950 percent. And instead of six rollovers on loans, as Missouri law currently provides, lenders would be restricted to three measly loans.

The lending industry is putting up a token protest. In private, one can picture lenders dancing for joy.

Rumor has it that the Sharkmeister Speaker Speaker Tilley was lurking in the hall outside Don Well's (R-Kwik Kash) Financial Institutions hearing last week.

Doobie Wrap Ellen Brandom and Kwik Kash were able to get all the Republicans to go on record voting FOR an APR of 1564%. This is pitched as reform by the predatory lenders legislative sponsors, but is really just the Payday Lenders Protection Act.  Will Birther Tim Jones and Sharkmeister Tilley bring it to the floor and proudly vote for a rate that would make Al Capone blush? We'll keep you posted.

Rumor has it that Don Wells’ Financial Institutions Committee was treated to dinner by the Pay Day lending industry last night.  Miss Liberty remembers that Mr. Wells (R-Kwik Kash) is a pay day mogul in Cabool. He is also the same committee chairman who wants unanimous votes only. Dissenters are sent to the hall. Is the smack down because reform might be afoot?

"I am flattered by the confidence Speaker Tilley has in my legislative skills, but I am only a sophomore in the minority party and have no ability to block legislation...Perhaps what speaker Tilley meant to say is that I am hard to work against --- that is because the public understands this is an industry that preys on the most vulnerable in our society and that is wrong."

Rep. Mary Still (D-Columbia) on Speaker Steve Tilley's (R-Perryville) sad attempts to blame her for his refusal to reign in abusive lending practices in Missouri

Speaker Steve Tilley continues to blame his shameless support for predatory lenders and the outrageous actions of Republican leaders like Don Wells (R-Kwik Kash) on Mary Still:

When the conversation turned to payday loan reforms, Tilley blamed the lack of progress personally on State Rep. Mary Still, a Columbia Democrat who worked for Jay Nixon in the Attorney General's Office. Still has sponsored a payday loan every year since she was elected in 2008

"Mary is not the easiest person to work with on either side of the aisle,"Tilley said. "She's had no luck getting anything achieved."

If Tilley, the previous Most Powerful Man in Missouri or any of the other leaders who control what bills pass or don't pass in the House cared about their constituents, they'd change the law.  But they care about the profits of the lenders like Wells, so they don't.  It's very simple.