Payday lenders are the target of recent legislation to control predatory practices. New federal legislation is in the works and some states have moved on this issue themselves.
But what is happening in Missouri is interesting. It seems that the Financial institutions Committee that has conducted hearings on the bill, only allowed representatives of the payday loan industry to testify. And guess what, the chair of the committee was the vice chairman, Don Wells, who owns a Kwik Kash payday loan store.
Last week, state Rep. Don Wells, R-Cabool and the vice chairman of the committee, staged a “lending presentation” in which representatives of the payday loan industry told committee members of the value of payday loans. The committee did not hear the other side. – Source
On hand were the industries’ lobbyists, John Bardgett of QC Financial Services, Randy Scherr representing United Payday Lenders and Mark Rhoads of Cash America International. The committee was shown a short video explaining the process of getting a payday loan from Advance America. – Source
I think Rep. Mary Still hit the nail on the head when she observed that Wells had a “blatant conflict of interest.”
“When a lawmaker uses his position to turn a legislative committee into a booster club for his own industry, it disgraces the entire Missouri House,” Still said.
According to Rep. Mary Still in Missouri:
- Missouri has more payday storefronts than almost any state and some of the weakest lending regulations in the nation.
- The Better Business Bureau of Eastern Missouri reports that payday loan companies in Missouri can charge up to 1,950 annual percentage rates. The average APR is 430.64 percent.
- The Missouri Division of Finance reports that Missouri law allows six loan renewals and a Missouri consumer can pay up to $395 in interest and fees on a $500 loan. All surrounding states forbid renewals. – Source
The bottom line here is that when legislation is allowed to be presented in such a fashion it doesn’t make it more palpate, it makes it reek. Fair or not, the hearings should never have been held in such a one-sided way. Rather than help the payday lenders in Missouri, Don Wells only accelerated their demise.