[CFR-Announce] PayDay Loan Operators Persuade Oregon Legislature
with ... Money, of course
Dan Meek
dan at meek.net
Sun Jul 3 00:20:25 EDT 2005
Here is another example of why we need campaign finance reform in Oregon.
By the way, none of the "campaign finance reform" bills the Legislature
is considering has any limits whatsoever on campaign contributions,
which is the essence of our Petition #8 and Petition #37. Oregon will
remain among the 5 states with no limits of any sort on political
campaign contributions, thus allowing the corporations to continue to
dominate Oregon.
* Payday loan limit bill dead, panel's chairman says *
* *
07/02/2005
By BRAD CAIN / Associated Press
*Angered by insinuations that some lawmakers have been bought off with
campaign contributions from the payday loan industry, a House committee
chairman says he is going to shelve a bill to clamp a lid on rates
charged by payday loan shops.*
"The bill's dead," Rep. Wayne Krieger said at week's end, a day after
his committee abruptly canceled a public hearing on the Senate-passed
bill to limit interest on the short-term payday loans to 15 percent.
Krieger and other Republicans are upset because a campaign finance
watchdog group this past week released figures showing that payday
lenders and other financial groups opposing the bill contributed nearly
$150,000 last fall to legislative candidates -- most of it to Republicans.
Among the top recipients of those campaign dollars were House Speaker
Karen Minnis, who got $14,500, and House Majority Leader Wayne Scott,
who got $11,000, according to the Money in Politics Research Action
Project.
The group's release said the contributions "help to explain why
regulations on the payday loan industry stalled in the House" after
winning Senate passage.
It also included a statement from Ron Cease, a former Democratic
legislator from Portland and Oregon Food Bank representative, who said
"money is clearly the driving force behind this issue."
"Out of a desperate need for money, thousands of hardworking Oregonians
are charged outrageous interest rates and predatory lenders are making a
handsome profit," Cease said. "Now we have to ask if money is stopping
this bill from receiving a fair hearing and a vote."
House Republicans don't quibble with the campaign spending totals listed
in the report. But Scott, the House majority leader, said he was
"offended" by the suggestion that he and other House Republicans were
sitting on the bill because they had gotten the campaign money.
"To me, that doesn't fly. I am not for sale to anyone," the Canby
lawmaker said.
Gov. Ted Kulongoski earlier in the week had called on House Republicans
to give the bill a hearing, saying the measure as passed by the
Democrat-controlled Senate is one of the key consumer protection bills
of the 2005 session.
Krieger appeared to relent on Thursday, scheduling a public hearing at
which representatives from both sides were invited to testify on whether
the payday loan industry in Oregon needs to be more tightly regulated.
But then the Gold Beach lawmaker learned of the watchdog group's news
release about campaign contributions, and he quickly canceled the
committee's hearing.
"When someone is making an effort to give you a hearing, slapping
legislators around is not very good politics," he said. "It was a
divisive thing to do, and I'm not going to put up with it in this
committee."
One of the key supporters of the bill, Phillip Kennedy-Wong of
Ecumenical Ministries of Oregon, says he isn't giving up on the bill,
despite GOP anger over the campaign finance disclosures.
"It is too important an issue to just let it die," he said. `We're going
to keep working for basic consumer protections to prevent people from
getting gouged and falling into a debt trap."
The measure was approved by the Senate in late May after sponsors said
it's time Oregon followed many other states in capping interest on
payday loans, which often are secured with postdated checks that lenders
cash on a borrower's payday.
Supporters said that restricting lenders to 15 percent of the loan value
as interest on a two-week loans is the equivalent of 391 percent
interest when figured on an annual basis. Advocates of the measure have
reported some lenders charge as much as 600 percent interest.
The measure also would limit loan amounts to $1,000 or 25 percent of a
borrowers' gross monthly income, whichever is less. Lenders also could
not renew a loan unless at least 25 percent of the amount borrowed had
been repaid.
Among those who have testified in support of the bill is Dena Speer, a
Portland woman who got into financial trouble when she and her husband
took out payday loans to help cover their rent payments after being hit
with unexpected medical bills.
Speer said she and her husband took out nine payday loans, ranging from
$200 to $400, and eventually ended up having to pay $8,000 in rollover
fees, interest charges and insufficient funds charges from her bank.
"When you're in a desperate situation, you're not thinking straight
because you need the money quickly," she said.
A spokeswoman for the Consumer Federation of America said she still
hopes Oregon lawmakers will pass the bill, which she said would put
Oregon in line with about 10 states that cap the short-term loans at 15
percent.
"This is a very modest reform," Jean Ann Fox said from the group's
headquarters in Washington. "The payday loan industry is doing very well
in states with that rate cap."
But a lobbyist for the payday loan industry in Oregon said she will
continue to work to defeat the bill.
Annette Price of the Community Financial Services Association says
payday lenders help needy people with poor credit who have few or no
other options and that they view the short-term charges as fees, not as
yearly interest rates.
"We have hundreds of thousands of transactions each year in Oregon, and
only a few complaints. We don't see that there is a problem that needs
to be fixed by the Legislature."
--
Dan Meek
*Attorney*
10949 S.W. 4th Ave
Portland, OR 97219
503-293-9021 phone
503-293-9099 fax
dan at meek.net
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