Boland's buds
The Argus/Dispatch has a piece on payday and title loan joints, or as they prefer to refer to themselves, "small lenders". It features the case of Lisa Carlson, a woman who borrowed $2000 from one such place, and by the time the ink on the contract was dry, they were repo-ing her car.
Here's the nugget:
Even today, she struggles to remember the exact interest rate, saying she thinks it was 386 percent, but she's not sure. In fact, if that was the rate, it would be below the average for the industry.(emphasis mine)
The average interest rate for loans from these businesses is 520 percent, said Steve Brubaker, executive director of the Illinois Small Loan Association, which represents payday-loan and title-loan firms in Springfield.
But one consumer advocacy group found at least one instance of a sailor at Great Lakes Naval Air Station paying an annual rate of 1,303 percent.
How did Rep. Mike Boland, a guy with a long pro-consumer track record, end up in these guy's pockets?
posted by The Inside Dope @ 3/12/2005
15 comments
15 Comments:
Payday and title loan cash best explains Boland's sudden flip-flop. .
It seems the consumer activist we elected to the Illinois House twenty years ago now, only survives in taxpayer financed mail.
From my vantage point, it's sad to watch Boland to sell us out for a few gold coins.
After years of running for office, Boland is more concerned with his future than ours.
How sad!
Dope, I think you have your facts wrong. Rep. Mike Boland was trying to work out a compromise that would protect consumers from the outrageous payday loan interest rates. He actually took the lead on the issue.
Leprechaun, please send to anything you can find that might indicate that your understanding of Boland's actions is closer to the truth.
I have no desire to bang on Boland if that is indeed the case, however, I'm going with what Rich Miller of Capitol Fax reported, as he's a very credible and knowledgable reporter on the Springfield and state-wide political scene, and THE go-to site for what's happening in the state politically.
I'll be happy to put the record straight if shown more convincing evidence that what Miller has reported about Boland's actions on this issue is incorrect.
But until then, I'm sticking with the facts as they stand.
Trust me HeadUsher, NO ONE thinks 487% interest is reasonable, especially the well off. They can swing pretty good rates due to their leverage.
But people who are A. ignorant of math, finance, and how loans work B. in desperate need of some money right away C. illiterate, or a combination of all three are the prime prey for these joints.
The Dope has experience with sub-prime lenders and used car lots and their operation is almost identical to pay day and title loan places.
Some buy-here, pay-here car lots can sell the same car 4 or 5 times! The poor clients are required to make large upfront "catch-up" payments and then make weekly cash payments from then on. And the moment they're a day or two late, they go hook the car and sell it again. The person has no car, and is charged $150 or more for the repo charges.
The lot buys a car for $500 puts $50 into it covering up obvious defects, sells it for $3000 to some poor sucker, they pay off about $2000 or so on it, then stumble, and back comes the car.
The effective rates on these sorts of contracts are simply not to be believed. But most customers have zero credit and are barely literate or simply don't care. The standing joke is that customers would ask, "How many miles 'til repo on this one?"
Payday and title loan places operate on the same principle. These places get their money back within the first few payments and the rest is gravy.
They're popping up like weeds across the country, and they're a blight on any community
Nearly everyone in the House and Senate has agreed with the current payday loan rip-off schemes. It's not just Mike Boland!
This has been going on for years!
Check incumbent's campaign reports and you'll soon find out everyone is in bed with the industry.
Three basic reforms are needed to balance the genuine need these companies fill in the marketplace with the fairness and consumer minded activism that Boland should be fighting for:
1) No automatic rollover of loans every 30 days. Each time it is rolled over they assess new loan fees and capitalize the previous interest.
2) No post-dated checks as collateral. The unfortunate sap incurs hundreds in fees from their bank and other businesses when the check bounces.
3) Reasonable fees and interest rates capped somewhere below 200%. It's hard to believe that 200% sounds like a great improvement, doesn't it??
Campaign finance law in Illinois is all about disclosure. I challenge Mike Boland to disclose his contributions from this industry and prove to us who he is really fighting for. Are you out there Mike??
I think II Cool T make some good points.
In addition to challenging Rep. Boland to disclose his contributions from those groups, let's have some more sunshine on all legislator's contributions from those groups.
Incumbents love to mop up the dough from "business" groups like the payday loan industry, and they would rather not have us know.
Thanks for the great posts, and especially LL for bringing up some excellent ideas for forcing these pariahs from being incredibly, mega mega, brain-bending greedy, to being mearly extremely greedy.
I thought there were laws against usury. I mean, it's even mentioned in the Bible! Wonder how many Bible thumpers are behind this industry.
And Leprechaun, I think your suggestion is obviously the best. We should all know who's zooming who.
As yet, I've not found a source that reveals who's giving to who. The official campaign finance disclosure forms won't be due until next month I believe. More light will be shed at that time.
And until further details are forthcoming on what Mike Boland's true objective was in this matter, perhaps it's unfair to malign him.
Apparently he voted for allowing the bill to be debated on the floor of the House, which would indicate a willingness to open it up to more stringent controls on these predators.
These outfits are like the vultures after a battle. Bush is driving thousands into financial strife, and these guys go around feeding on the wounded. They're beneath contempt.
If Chairman Boland wanted "the bill to be debated" and indicated "a willingness to open it up to more stringent controls...," why then did Boland let the payday-loan bill out of his committee?
The answer may surface in pending campaign disclosure documents. If Boland had his gruby hand in the cookie jar, Mr. Consumer has some explaining to do!
I would think that letting it out of his committee was in and of itself allowing it to go to the floor where it could be ammended to provide more stringent controls.
Is there any evidence that Boland was actively trying to work on behalf of the payday loan lobby?
Is there any evidence that he was opposed to stricter limits and controls on them?
Just asking.
Aha! Thanks. I was getting a little wobbly there. Your comment was coy, but helpful. ;-)
Boland has always been self serving and self promoting.
Perhaps you should make the distinction that you feel he's overly self-promoting. After all, every politician is highly self-promoting just due to the nature of the position.
OVERLY then... more so than most.
Post a Comment
<< Home