After a short stint spent ostensibly serving the public, former House Speaker William J. Murphy now pointedly serves himself at the public’s expense working as a hired gun for predatory lenders Advance America, which has paid Murphy $50,000 to lobby the General Assembly on its behalf.
Like any hired gun stripped clear of conscience, Murphy is unconcerned with the harm his corporate masters inflict on the most vulnerable members of our society. In fact, Murphy seems to like the money mercilessly drained from low-income families so much he has signed up to repeat last year’s performance.
Surely, to be able to advocate properly for Advance America (whose name could not be more ironic) Murphy has acquainted himself with the arguments and analysis those in favor of banning payday loans have made. Murphy must know that payday loans:
- Drain money from low-income communities in the form of high interest. The money drained leaves the community and goes directly into the bottom line of companies like Advance America and the pockets of corporate lobbyists like William Murphy.
- Exploit financial hardship for profit by targeting those in low-income communities and those who live near military bases. Whereas middle income families can get loans with interest rates around 25%, under the terms of payday loans available in Rhode Island low-income families can pay %260 or more!
- Are made by companies that often resort to aggressive, possibly illegal advertising and collection strategies.
Payday loans amount to legalized racketeering. Companies like Advance America function by exploiting loopholes in the laws against usury. That is why payday loans are illegal in thirteen states, including Connecticut, Vermont, New Hampshire, Maine and New York, and highly regulated in Massachusetts.
No wonder Advance America fights so aggressively here in Rhode Island. Our state is the only one in New England that allows the immoral practice of gouging our own poor.
On Wednesday I attended a vigil held by the Rhode Island Interfaith Coalition that sought to call attention to the evils of payday loans. In attendance were over one hundred people representating over 30 faith and non-faith traditions. Governor Chafee said a few words, and Senate President Paiva-Weed stood side by side with House Speaker Fox watching the proceedings.
Speaker Fox seems unmoved by the vigil. In the ProJo, Fox said,
Obviously, there are advocates who say that it’s a necessary service and that if the service was not there, then these folks would go somewhere else and then there are advocates on the other side who say they are predatory lenders and they should be put out of business.
Rep. Frank Ferri introduced legislation effectively banning the practice, and Sen. Juan Pichardo said he will sponsor the bill in the Senate, but Fox seeks compromise. How effective the compromise that Fox seeks will be remains to be seen. Fox’s re-election this year was not as simple or obvious as it appears in retrospect. Stumbling on issues like payday lending will mobilize those who live in his district (like me) to begin a very real search for his successor.
Fox might have been hand-picked by William Murphy to lead the House in his wake, but Fox was elected by citizens who care more about those suffering from grinding poverty than they do about Advance America’s bottom line or William Murphy’s next $50,000 pay day.
Does anyone know why there’s no Marquette problem with regulation of payday loans? Are payday lenders exempt from Marquette protection? If so, how did they wind up exempt from usury laws in the first place? Does anyone know the history here? Marquette caselaw is irritatingly hard to find online.
Marquette applies to federally chartered banks, which payday lenders are not, so they do not get the same “protection” of being able to charge an unllimited interest rate as national banks do.
Normally, they would be subject to RI’s usury law, capping interest at 21%. However, in 2001 the legislature enacted a law that allowed “check cashers” to charge a “defered depoisit fee” of 10%, allowing them to advance a paycheck and charge a 10% fee on the “advanced” amount. I am not a math guy, but my guess is that works out to about a 260% APR.
Interestingly, the Check Cashing Bill was sponsered by Reps McCauley, Alemdia and Williams.
You had a successor but you’re friends were seduced by the power of the leadership position. Nice to see you accepting faith based influence on government when it happens to agree with your point of view.
When playing “gotcha” it helps if the victim has contradicted himself, DogDiesel. I’ve never said that I’m in favor of faith-based influence on government. I’m in favor of a secular society, and the separation of church and state. I don’t think religious arguments for or against governmental policies are valid. Case in point: if the vigil on poverty taking place at the State House only expressed the point of view that payday loans are wrong because God said so, that wouldn’t be a proper argument. Different interpretations of God’s will lead to many different, contradictory opinions, and are valueless. However, if a religious person comes to the point of view for the reasons I’ve outlined above and also happen to think that usury and exploiting the poor is a sin, then we are on the same side, because actual persuasive, secular arguments are being made.
As far as the other half of the comment, the voters decided between Binder and Fox, and if they made the kind of political calculations you are suggesting, then your problem is with democracy and an informed electorate, not my friends.
Like I said…
I have used a pay day loan occasionally when a big unexpected bill pops up. I pay $36 to borrow $200 for 2 weeks. A bank charges you $35 to borrow $1 if you make a mistake doing math in your check book. Who are the rip off people here? One time I used the wrong deposit slip (my mistake) and my bank charged me $175 in fees for 5 $4 lunches on my ATM card even when I had $1600 in a savings account in the bank. Yes I made a mistake but the bank could have just transferred some money or taken 5 minutes to call me. By the way most banks have a way to make your card be turned down if funds aren’t available but you have to ask for it. Then they often “forget” to keep that feature turned on also. Better a devil you know at the fast payday loans place that is honest about his fees up front than your good buddy banker that will twist the knife he drives in your back when you are shaking his had in friendship.
Is this site getting spammed by payday lenders?