How Predatory Lenders Thrive in Virginia

    180
    2
    SHARE

    Staunton City Councilman Bruce Elder won’t let the payday loan battle go. Delegate Cline (R-Rockbridge) doesn’t foresee any action on the issue. Since 2007, Elder has played a key role in a grassroots effort to reform the industry. The industry stole the march long ago. Democrats share the low ground.

    As 2011 and 2013 approach we ought to measure who we support a bit more judiciously. Democrat does not reliably equate to progressive. And some Democrats just plain fail to measure up. Though rarely does a single issue serve as a reliable litmus test, this one provides an appropriate reference point because it embodies a broader social aspect: the role of government and the relationship of wealth and its influence to governance. That Senator Saslaw (D-35th) ends up the patron of SB 606 allowing effective 250%+ interest rates and enlists Delegate Kaye Kory (D-Fairfax) to do his bidding in the House is curious. No Republican to hang this one on, though it is informative that Governor McDonnell’s new Commonwealth Chief Information Officer didn’t eschew a little gratitude.

    The industry generously reaches out to both sides of the aisle. These bills generally originate in the Commerce and Labor committees of our general assembly. The three largest payday loan industry contributors have managed to grease the palms of 12 of the 15 current committee members in the Senate (including the recent Democratic nominee for governor) and 16 of the 21 in the House. Only one Republican and seven Democrats have failed to score. The three largest contributors have spread $125,000 to the 36 members who accepted these donations. But the two committee chairmen, Saslaw [$25,437] and Delegate Kilgore (R- Lee, Scott, and parts of Washington, and Wise) [$14,075] were most highly regarded amongst peers. Senator Norment (R-3rd) [$21,869] rounds out the top three overall. By the way, Delegate Cline has received $750; a real bargain for the kind of advocacy he delivers.

    Of the potential statewide candidates mentioned yesterday by Elaine and in comments by readers, a few are not tainted. Unannointed committee members include Senators Herring (D-33rd) and McEachin (D-9th), so they deserve special regard. Senator Peterson (D-34th), Delegate Surovell (D-Fairfax), Jon Bowerbank, and Terry McAuliffe all failed as objects of industry attention. But Delegate Ward Armstrong (D-Patrick and parts of Carroll, Henry, and the City of Martinsville) finishes among the highest non-committee recipients with $5,500 from these predators, well ahead of Senator Edwards (D-21st) with $1,100, Delegate Alexander (D-Norfolk) with $250, and another recent statewide candidate, former Delegate Brian Moran ($3,500).

    That the Virginia Organizing Project views Saslaw’s bill as a positive development underlines how ineffectively the industry is regulated. That fellows like Bruce Elder keep their focus is hopeful. That we keep issues like this as part of the equation for supporting Democrats and the Democratic Party of Virginia is essential.

    • I highly recommend the book SHORT CHANGED: Life and Debt in the Fringe Economy by Howard Karger.  It was laying out issues from payday loans to predatory lending in excellent detail and in an informative way without being a polemic (probably the reason most people have never heard of it.)  Anyone who read this before the real estate crash was prepared for it — or at least, couldn’t say that they weren’t.