Mattiello’s payday loan position opposed by Catholic ideology


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Mattiello 1
Nicholas Mattiello

Correction: After this piece was published I received the following communication from Carolyn Cronin, Director of Communications for the Diocese of Providence:

“The article you are referencing in your piece was an editorial in the RI Catholic newspaper.  Bishop Tobin is the publisher, but he does not write or review the editorials. It is a separate opinion of the paper. So to attribute those quotes to him are not accurate. I would appreciate the clarification.”

When I asked Cronin what Bishop Tobin’s views on payday lending are, I received this reply:

“The Bishop supports the traditional teaching of the Church, but has not made any specific statements about pending legislation. Father Healey represents the diocese on this and other issues at the Statehouse.”

The piece below has been modified to reflect the fact that the statements made in Rhode Island Catholic should not be attributed to Bishop Tobin.

I regret the error.

The Rhode Island Catholic newspaper came out against payday loans in an editorial.

After referring to such loans as “heresy” Rhode Island Catholic said, “Usury, the charging of extreme interest, is condemned by Catholic doctrine. Recently Pope Benedict XVI explicitly condemned usury in his encyclical letter Caritas in Veritate. St. John Paul II called usury ‘a scourge that is also a reality in our time and that has a stranglehold on many people’s lives.’”

“Rhode Islanders,” continued Rhode Island Catholic, “especially R.I. Catholics, should stand up against payday lending, the usury of our time. The extremely poor need protections from what appears their only option in a challenging economy. Extreme rates of interests, with little chance of payment in a timely fashion, are not the way to grow a healthy economy. Instead, the poor need regulations against financial charlatans who seek the economic ruin of those on the margins.”

That usurious lending is ideologically opposed in Catholic theology should come as no surprise to Speaker of the House Nicholas Mattiello, a lifelong Catholic, who continues to oppose reform.

“The case has not been made to me to terminate an industry in our state,” said Mattiello last month, “The arguments against payday lending tend to be ideological in nature.”

This would not be the first time that Mattiello has found himself politically at odds with his putative faith. A Providence Journal report, published shortly after his accession to speaker, says, “A Roman Catholic who for half his life had been a lector at Immaculate Conception Church, in Cranston, Mattiello opposed gay marriage. His view changed, he says, as society became more accepting and the issue became one of equality. Today, Mattiello says his vote to legalize gay marriage is one ‘that I am proud of,’ even though it cost him his lector position.”

Mattiello’s recent statement on payday loans is no different than the view he expressed back in March 2014, when he said, “Payday lending is a hot button issue, but the consumer likes the product. It’s an ideological approach. I will make my decisions based on evidence and how it actually impacts people and our economy. I’ve asked for evidence on that issue in the past in my position as House majority leader and I’ve been promised a dozen times over, and I’ve never gotten evidence on that.”

What evidence Mattiello is looking for is hard to imagine, given that year after year the House Finance Committee hears testimony from the AARP, the Economic Progress Institute, Rhode Island Coalition for the Homeless, Rhode Island AFL-CIO and the Rhode Island Payday Lending Coalition. These groups present reams of evidence detailing the harmful effects of payday loans to both individuals the state’s economy.

To some, Mattiello’s willful ignorance about the plain evils of payday loans seems predicated on the special relationship he has with the payday loan industry’s paid lobbyist. According to RI Monthly, former Speaker of the House William Murphy, who is the paid lobbyist for the payday loan company Advance America Cash Advance Centers, is “like a brother” to Mattiello. “In 1994, Mattiello ushered at Murphy’s wedding.” In 2006 Murphy encouraged Mattiello to go into politics, starting him on his path to speaker of the house.

One of Speaker Mattiello’s favorite words is “outlier” in that he claims he doesn’t want Rhode Island to be one. “Rhode Island is one of only 13 states with an income tax on Social Security,” said Mattiello, “and I am tired of our state being an outlier.”

Sam Wroblewski, at WPRO, writes, “Mattiello said not assessing fees to out-of-state trucking operations makes Rhode Island an outlier in the northeast.”

One way that Rhode Island is an outlier that doesn’t seem to bother Mattiello is payday loans.

“Rhode Island payday loans are authorized to carry charges as high as 260% APR,” says the Economic Policy Institute, “Payday lenders can charge this rate in Rhode Island because in 2001, payday lenders received a special exemption from the state’s usury laws, making RI the only state in the Northeast to do so. The exemption enables licensed check cashers to make payday loans as at 260% rather than complying with the state’s small loan laws.”

Apparently, being an outlier is okay if one of your best friends is making $50,000 a year.

It seems clear that the day Nicholas Mattiello will allow a vote on the abolition or restructuring of payday lending laws here in Rhode Island is the day that Advance America decides to stop employing Mattiello’s friend Bill Murphy as a lobbyist. Until that day, the poor will continue to be exploited and money will continue to be sucked out of Rhode Island communities.

Catholic ideology be damned.

Rhode Island Factsheet w Supporters

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Speaking to the Speaker


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State House Dome from North Main Street
State House Dome from North Main Street
The State House dome from North Main Street. (Photo by Bob Plain)

Winners in political races have it easy. They thank everyone and move forward. The Silver Medalists analyze what went wrong and fade into the shadows. Is it possible to write a post-election column as the loser and not sound self-serving, shrill or sour? I’m going to do my best.

From the beginning, this race was about the way that the legislature hasn’t been working effectively for the citizens, voters and taxpayers.

My analysis of the way the system functions is this:

  • On Election Day, 75 men and women are voted into the Rhode Island House of Representatives.
  • Shortly after that a number of them meet. They horse trade over issues and bills and power. Then they determine who will be the Speaker. You’re either on the team or you’re off.
  • In January, the 75 Reps vote on the Speaker and the Rules of the House. Currently, these rules give the Speaker the authority to set the agenda and move legislation on and off the floor at his or her discretion
  • And for the next two years, all of the Reps who are not part of the “Leadership” beg for scraps and line items. The true outsiders get nothing.

The system, as a voter in Mt. Hope said, isn’t broken. It works great for those in charge. But it doesn’t work so well for Rhode Island. We, the people, elected you to be our Representatives, not to give away your power.

The deals that representatives make are supposed to be in the best interest of the state as a whole, not the special interests and campaign donors. Payday lending rates of 260% annual interest are usurious and unjustifiable.  Votes on social issues, like Marriage Equality, ought to be held early every session rather than suppressed.

Our State’s business climate is not just dependent on tax rates, tax breaks and loan guarantees. Your business should not depend on the whim of a Speaker and the uninformed consent of the Legislature.

Our children should not be educated in a system that is overhauled in the middle of the night on a budget vote with no public debate, discussion or even planning. Children need more than institutions and buildings, they need books and materials. Students need more than testing, they need teachers who have the time and permission to teach them on their own terms.

I hope that my challenge to Gordon Fox reminds him, and every other Speaker who follows, that the power that they wield derives from the people.

You are not in charge. We are.

RI Future, Gordon Fox Serve Those in Charge


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In two of his recent Progress Reports, Bob Plain, the editor of RI Future, posted comments that trouble me on several levels.

It’s unlikely Binder will knock Fox out of office, but he could help move him back toward the left side of the political spectrum. Or he could do just enough political damage to make it hard for him to retain the Speaker’s gavel, which might not be a good thing for progressives…
—Bob Plain, RI Progress Report

Fox is more conservative than we’d like in a Speaker and Binder is less experienced than we’d like in a state Representative. Practically speaking, wheen factoring in both of these circumstances, the House of Representatives probably moves to the right if Binder were to upset Fox.
—Bob Plain, RI Progress Report

This logic remind me of what a Mt. Hope voter said to me recently:

“I don’t think the government is broken. I think it’s working just fine for those who are in charge.”

Unlikely?

As I’ve been knocking on doors throughout my district, the reception I have been getting is warm and congratulatory. People smile and thank me for running, especially against Gordon Fox. Then they say, “Do you think you have a chance?” I answer quite honestly, “If you and all the people you know vote for me, then I will win.”

Fox moves left?

  • 38 Studios: A deal brokered by Michael Corso, a Fox business associate who profited at the expense of the taxpayers. Shoved through in a typical late night session with little debate. Representatives on the floor of the house deny that they knew that the $75 million was slated for a baseball players dream team. Even now, Gordon Fox flip flops on whether he knew/didn’t know before ramming the bill through.
  • Payday Lending Reform: 50 State Reps co-sponsored a bill to reduce payday lending from 260% to about 36%. Bill Murphy, a former Speaker, was paid $50,000 by an out-of-state payday lending company. The bill died in committee. Fox said that the bill had been watered down. Why didn’t he just put the straight bill on the table?
  • Marriage Equality: Civil unions are not enough. Maybe when Fox made his great compromise he thought that they were. If so, why have only 52 couples opted for the watered-down civil union option in the past two years? Since then Fox has promised to pass marriage equality but continued to duck his responsibility and avoid wielding his power to bring this black and white issue to a vote. Why? Because it protects Conservative Democrats, and it might fail. Boo hoo.
  • The Midnight Education Merger: At the beginning of 2012, Fox promised no last minute votes. He broke that promise, and one of the results was the mashup of the Board of Regents and the Office of Higher Education. Asked in a debate why, he shrugged and said, “We have to try something.” No public discussion, no debate. From the folk I’ve talked with one in the elementary schools or universities want to be under the thumb of the same organization. George D. Caruolo, another former Speaker, will have a good job.

Where is the Progressive in these issues?

Political Damage?

Our legislature is dominated by fear. The Reps and Senators give away their power at the beginning of the session to the “leaders” and then beg for crumbs.

They cower in fear in the halls of the legislature and then crow when the leaders give them a line item in the budget or let one of their proposals rise from the black hole of committee. They whisper and confer and suspend the rules and vote on bills that most of them haven’t read.  This is called “hardball politics.”

How’s that working for our state? The other day at the gym, a guy on a treadmill joked that every year the legislature passes lots of election bills because they always seems to benefit the legislators.

What else benefits the legislators? They get campaign contributions from special interests, and then submit bills, vote on bills and push bills through that benefit those special interests.

And it’s all out there in the public record.

  • Gordon Fox collected $7,200 in contributions from auto repair shops, just 90 days before he pushed through a controversial auto insurance bill that benefitted those shops at the expense of consumers.  Thankfully, the Governor vetoed the bill.
  • The law firm Adler Pollack and Sheehan raised $7,300 for the Speaker.  Shortly after that, they got the contract from the Joint Committee on Legislative Services to defend the gerrymandering in the legislative redistricting plan in court.
  • And as recently as September 5th, the Speaker hauled in $5,900 from the lobbyist for the car wash industry and a number of car washes.  That came just months after the Speaker rammed through a last minute budget proposal to exempt car washes—an only car washes—from the Governor’s expanded sales tax.

Are these really all coincidences? Who benefits from contributions to Gordon Fox’s $200,000+ campaign slush fund? Voters? Taxpayers?

Was this a move to the right or the right move?

Meanwhile, Fox has bought into the Conservative dogma that raising taxes is bad for business and good for government. And he’s given the Casinos a sweetheart deal that means taxpayers will have to loose three times as much at table games as they do at the slots just for the State to break even on what it gets now.

How’s that all going for us?

Is Speaker Fox retaining the gavel really doing the Progressives any benefit? Is having Gordon Fox in the House benefitting the people in District Four?

I think it’s clear that our “representatives” haven’t been working for us. They have been working for each other and for their special interests.

In Gordon Fox’s case, he’s been working hard  for his business associates, former Speakers, and for the campaign contributors. For the people in his district? Not so much.

I will be honored if you vote for me, and help knock them out.

Mark Binder Takes Campaign to TV


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“Are you a credible candidate?”

I’ve heard that question again and again and again. What it’s code for is, “How much money have you raised?” (And “Do you own a car?”)

I learned during my first campaign that the press and media have a Woodward and Bernstein relationship to money. (Remember the scene from All the President’s Men where Jason Robards growls, “Follow the money!”) Money is something you can measure and count. The Board of Electors requires regular mandatory filing  of campaign contributions and expenses. So it’s easy to find out how much money someone has raised, who contributed it to their campaign, and where they spent it. This gives “the media” the illusion that they have the measure of a candidate.

It’s the reason that you hear so much about presidential fundraising. If they have more money, they must be getting more votes, right?

Bought and Paid For?

Why do people donate money to campaigns? Sometimes it’s because they believe in the candidate and her/his mission. Sometimes they want to oppose the opposition.

And sometimes they just want a favor down the road…

For example, let’s say that an important piece of legislation is coming before the House on say, Auto Body Repair. And you know that nothing gets on the floor without the Speaker’s approval.

Do you think that more than $3,000 worth of campaign contributions from people who work at Auto Body shops makes a candidate more “credible” or have they been “bought and paid for”? (See Gordon Fox’s filing for January-March, 2012)

10 News Conference

I was all excited. Last week I’d received an email from Stephanie Cunha inviting me to participate in the 10 News Conference program with my opponent, (soon-to-be-former) House Speaker Gordon Fox.

Then I got nervous. Here I was, the “challenger” going up against a 20-year politician. I did a lot of preparation and homework, and when I got to the TV station, I learned that he wasn’t coming. Instead it would be Jim Taricani and Bill Rappleye and me. For a time, I got even more nervous. Me and two journalists. I was worried that they might tag team me…

Maybe I could talk to an empty chair, I joked.

Instead it was a wonderful gift. I had a full half hour news broadcast to explain why I got into the race (38 Studios and Mr. Fox’s continued silence and refusal to take any responsibility), what else bothered me about my opponent (wimping out on Gay Marriage… not letting the Payday Lending reform come to a vote, even though 50 representatives had signed onto it… 38 Studios and Michael Corso… creating an atmosphere of fear in the State Capitol… 38 Studios), and even time for some thoughts on public education (reduce testing, decouple testing from teacher evaluations, halt the end of session midnight merger of the Board of Higher Ed and the Board of Regents…).

Finally, they asked me the question I’d been waiting for, “Are you a credible candidate? You’re going up against the Speaker of the House.”

Believe it or not, it was an upbeat and positive and jovial time.

The air date: NBC 10 on Sunday, September 16 at 11:30 a.m. to watch, and then ask yourself the question, “Is this a credible candidate?”

Or you can watch it here:

Payday Lenders Hire Power Broker Bill Murphy


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Former Speaker of the House Bill Murphy (photo by Ryan T. Conaty: ryantconaty.com)

One of the most interesting battles going on in the state house this year is over the fate of the “payday lending” industry. Payday loans are short-term loans, typically arranged something like this: I loan you $100 now in return for $110 taken from your next paycheck in a couple of weeks.

This sounds good, unless you do the math and notice that this works out to about a 260% annual interest rate.  If you don’t, it’s likely enough that in two weeks you’ll ask for an extension, and it only takes a couple of dozen like you and suddenly my business is booming.  And there are a lot more customers than that around here.

It wasn’t legal to charge interest rates that high until an exception to usury laws was carved out for check-cashing businesses in 2001. According to Margaux Morisseau, who is spearheading the effort to repeal this exception, payday lenders in Rhode Island now write over 140,000 of these loans each year, totaling $50 million, the bulk of which are written by Advance America, based in South Carolina, and Check ‘n Go, nominally based in Ohio, though it might be controlled by partners based in Texas or London. You can admire the process at rhodeislandpaydayloans.com. My favorite quote:

“When it is due date of your RI payday loan, the loan amount and the service charge will be automatically debited against your pay check. An extension of your RI cash advance is also possible by paying an extension fee.”

There are a couple of interesting points to the story (beside the lack of proofreaders for web content). First, it is consistently astonishing to me both how profitable it can be to exploit poor people — and how many financiers are eager to do so. After all, a huge amount of the financial carnage of the 2008 meltdown was built on liar loans and various kinds of mortgage fraud aimed at sucking wealth from low-income families who hoped to afford a home. (And no, the Community Reinvestment Act had nothing to do with this, as you’ll doubtless read in uninformed comments.)

Obviously there is a risk associated with these kinds of loans, but even assuming a generous loan loss provision, we’re talking about more than doubling one’s investment each year. These are returns investors in more, um, traditional businesses can only dream of.

There’s a bill in the Assembly that would repeal this exception and limit interest to 36% — still awfully high, but in the range that banks charge on some credit cards.  Morisseau has put together an impressive coalition to push it, and Representative Frank Ferri and Senator Juan Pichardo have been very energetic sponsors. Morisseau and Ferri found 50 co-sponsors out of 75 members for the House Version, and she and Pichardo got 25 out of 50 in the Senate. Sounds like a slam-dunk, right?

Wrong. On the other side, Advance America has retained Bill Murphy, the recently retired Speaker of the House.

So what can a retired Speaker do in the face of 50 house members who oppose him?  Sure he knows where a lot of bodies are buried, but what can he possibly hold over so many people?  How is this a fair fight?

Here’s how it works. Murphy’s services are not provided gratis to Advance America. They are paying him $50,000 this year, according to the Secretary of State’s web site. How much work will that entail?  A bunch of phone calls and a handful of meetings. Nice work if you can get it.

And you can get it if you try — so long as you’re a current member of the House or Senate leadership. If Bill Murphy can prove to Advance America that he’s worth $50,000 a year for almost no work, then Speaker Gordon Fox or Majority Leader Nick Mattiello or even Corporations Committee Chair Brian Patrick Kennedy can justifiably claim to be worth the same amount to lobbying clients who happen along after they retire from the House. In other words, killing a bill like this on Bill Murphy’s say-so is key to a big payday for them down the road. Preserving a system that benefits Murphy is the way to keep the trough full at which they might hope someday to feed.

Of course, there are lobbyists who do real work for their money — arranging testimony, doing research, preparing press campaigns — and some of those are even ex-legislators. But the real money is in having a name that can make things happen despite how many are on the other side.

Now in fairness, I have no idea whether Fox, Mattiello, or Kennedy hopes to cash in on their service in this way, and in all likelihood, neither do you. But a very compelling indicator of whether they do is if this bill — sponsored by two-thirds of the House — gets out of committee and onto the House floor for an actual vote. Are the people who control the agendae of the House and Senate interested in a democratically run General Assembly, or is their interest in preserving the system by which ex-legislators profit handsomely from what was, in theory, public service?

Appendix:

For comparison,

Dan Connors, former Senate Majority Leader

George Caruolo, former House Majority Leader

Stephen Alves, former Senate Finance Chair