"Members of Congress serving on [Senate and House Finance committees] have collectively received over $3.4 million from the payday lending industry.” ―OpenSecrets
For many years we have worked with other groups who fight for fair treatment of those who need small short-term loans. “Payday” loans unfairly punish those with few resources in general, but also in a very real way, it affects those coming out of long-term incarceration who have court-ordered bills to pay. Unfortunately our legislature has removed every restraint from this industry.
Nancy’s blog post last week was an eye-opener for some here in Indiana. It concerns the recent scandal surrounding members of the Ohio State Legislature and potential gifts and “benefits” from payday interests which led to the resignation of the Speaker of the Ohio House. The FBI issued a warrant, “concerning: payday lending legislation; evidence of payments, kickbacks, bribes, or other benefits (such as payment of travel-related expenses) offered to, paid to, or received by, legislators of the State of Ohio…”
Doing a little more digging, we find that members of the U.S. Congress are benefitting from payday interests as well. According to data from OpenSecrets.org, of the 78 senators and representatives on committees that affect U.S. payday loan interests, 86 percent received gifts, donations, or other benefits from payday concerns. (Remember, they don’t need every vote in their favor, just a safe majority.)
The payday cabal gives to both Democrats and Republicans. It doesn’t matter which side of the aisle, just as long as they serve on a finance-related committee. Gifts from payday loan concerns of more than $3.4 million have been accepted in part by many federal legislators including the following: Sen. Richard Shelby (R-AL) pictured, $250,000+, Sen. Mike Crapo (R-ID) $162,000+ Sen. Kyrsten Sinema (D-AZ) $150,000+, Rep. Pete Sessions (R-TX) $230,000, Rep. Blaine Luetkeymeyer (R-MO) $227,000, Rep. Gregory Meeks (D-NY) roughly $178,000. The list is long. Meanwhile payday lobbyists spent $4.2 million to push legislation that would allow them to make larger more lucrative loans on the backs of our most vulnerable citizens.
We have found the actions of our own Indiana legislators to be concerning in the area of payday loan legislation, as well. While 90 percent of Hoosiers say we should have a 36 percent APR interest cap on payday loans, the Indiana Legislature not only exempted payday loan companies from a 36 percent APR cap last year, they exempted payday loans from the Indiana loansharking limit of 72 percent as well. Although there is zero evidence that we’ve seen indicating that Indiana legislators are taking money or trips from payday lenders, voting records that have overwhelmingly protected the payday business model could possibly invite a closer look. That would be a sad day for us all.
Who are these borrowers? Anyone with an income and a desperate need for a small loan: Those new on the job after coming out of incarceration with little or no money, the elderly on Social Security, veterans on disability, or the lady who rings up your groceries…you get it. But how can there be any justification for the fact that you and I are protected by law from loansharks charging more than 72 percent, yet we allow the poorest among us to be charged up to 391 percent on loans that often result in bankruptcy and homelessness?
It seems that our legislature is marching to the beat of a drum the rest of us cannot hear. Like many other states have done, it’s time to stop the payday plunder in Indiana and enact a 36 percent APR cap for these loans.
Jim
P.S. Payday lobbyists say these loans are the only source of cash available to those without substantial assets, but we know this is not true based on rates offered by just one of UNITE INDY’s Service Provider Partners, NorthPark CCU.
