The Hubris of the Rhode Island Payday Loan Industry

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It’s been a while since the Rhode Island Senate has held in-person committee meetings in rooms without cameras, meaning these hearings aren’t live streamed, or even recorded, beyond a pretty lousy audio recording.

UpriseRI brought a camera into room 310 last night to cover the Senate Committee on Commerce that it was adopting, for perhaps the twelfth time in a dozen years, legislation that would repeal the general law provisions that allowed providers of deferred deposits, also known as “payday lenders.”

The invoice, S2166is sponsored by Senator Ana Quezada (Democrat, District 2, Providence), who was unable to introduce his bill in person. See some previous reports on the subject of payday loans here:

Repeal of this provision is supported by a wide range of community, religious, social service, and advocacy organizations and activists, but opposed by a small cabal of powerful, wealthy, and politically connected lobbyists and corporations making literally millions. of dollars through its predatory lending practices. .

In his testimony in favor of the bill to waive personal loans, Margaux-Morisseaudeputy director of the Rhode Island Coalition to End Homelessnessspoke about doing social service work in Woonsocket in 2009 and realizing that “working families were going to be homeless” because the payday lender Advance America he had opened a store in the middle of the neighborhood where he worked and it was aimed at residents.

After working with lawmakers in the General Assembly to write the first payday loan reform bill, which would have capped the interest lenders could charge at 36% per year, the bill was removed from the bill. consideration minutes before a scheduled plenary vote “because of a phone call made by a powerful lobbyist,” Morisseau said.

In the 12 years since then, lobbyists continue to be paid tens of thousands of dollars each year, preserving the millions of dollars in profits predatory lending companies extract from communities. A bill to stop payday loans has never made it to the House or Senate for a vote.

The protection of payday lenders granted by the leadership of the General Assembly, protections that include holding hearings in chambers without cameras, has generated arrogance among those who lobby and benefit from payday loans. lobbyists Stephen Alves ($40k paid annually by predatory lender financial access) and former Speaker of the House William Murphy (a bargain at $30k annually from Purpose Fundingl, doing business as Advance America) don’t even bother to give oral testimony to the committee, at least when there are cameras rolling, but instead present written testimony. (Murphy does better than Alves: his name doesn’t even appear in the testimony he provides. Instead, he delivered a letter from Purpose Financial’s senior policy adviser.) Julie Townsend.) You can read his testimony at the end of this report.

These lobbyists do not testify at the hearings because it is not necessary. They have the House of Representatives firmly under their control. Hearings about your bills are held in rooms without cameras. They kill bills with last minute phone calls and at fundraisers. They see inequality and human suffering not as an evil, but as an opportunity.

But the hubris award for those testifying against the payday loan reform legislation at last night’s committee hearing has to go to bill stadermanpresident of the Association of Rhode Island Financial Services Centers, which owns and operates payday loan companies throughout the state. Staderman presented himself as a smart and charming monster, but he is neither smart nor charming.

Staderman began by saying that payday loans were “simple” things that people enter into voluntarily, of their own free will. Taking advantage of the privilege he felt in the room, Staderman said, “I’m sure most people here, probably everyone here, haven’t taken out a payday loan themselves…”

Getting these payday loans is “quick and it’s a small amount — the maximum amount in Rhode Island is $500,” Staderman said, prompting a challenge from Sen. Tiara Mack (Democrat, District 6, Providence) during questioning.

Noting her personal experience of growing up on a low income, “I’ve seen the financial cost, I’ve seen the generational cost, and I’ve also seen the generational cost of predatory payday loans,” Senator Mack said. “We can call them small amounts [but] $500 for someone who doesn’t make $500 a week… that’s a lot of money.”

Staderman couldn’t help but respond to Mack’s powerful, factual and emotional testimony with anything but condescension. “I appreciate that you agree with what I said,” Staderman said. “Here’s why: $500, I said before, it might be a small amount, I grew up in a house in Brooklyn…” Then, with a kind of indefinable accent, Staderman continued: “$500. It’s a lot of fucking money for that. Sensing that he was going to be interrupted by Senator Mack, Staderman interrupted, “Let me finish please, Senator…”.

Staderman then babbled for minutes and answered questions from the senators. Cynthia Mendez (Democrat, District 18, East Providence) and kendra anderson (Democrat, District 31, Warwick, Cranston). Finally, Senator Mack spoke again, trying to explain her family’s struggle with generational poverty. When tears came to Senator Mack, Staderman said he cut her off with, “I grew up with that, I’m sorry.”

“I’m not done,” Senator Mack said. “I’m crying, but I’m not done. It’s hard…”

“My father didn’t have a car until he was 40 years old,” Staderman said, interrupting again. Or a license.

“Yes,” said Senator Mack, who patiently explained more of her lived experience. She also spoke about workers who can’t afford the time away from work to testify at the State House on issues of vital importance.

When Senator Mack left the room to regain her composure, Staderman still needed the last word. He was interrupted by the committee chairman. susan sosnowski (Democrat, District 37, Block Island, South Kingstown). “No, that’s enough,” she said.

Here is Staderman’s full testimony:

Here is the full Q&A session:

What none of the testimony provided by the payday loan industry does is attempt to refute the arguments made against the practice by advocates who testify against it.

state treasurer Seth Magazine, for example, noted that Rhode Island remains the only New England state that still allows this loan sharking practice. Treasurer Magaziner added that the US Congress has banned payday loans on and around military bases because they are seen as a threat to military readiness.

alan krinskytestifying on behalf of ir el Economic Progress InstituteHe made several key points, supported by research and data, about the negative impacts of payday loans on both borrowers and the community.

  • The average payday loan consumer is trapped in a cycle of debt, taking out 10 loans per year due to an inability to pay off the balance and ever-increasing fees;
  • payday lenders increase wealth disparities by disproportionately targeting people of color; and
  • nationally, 18 states and the District of Columbia enforce laws with rate caps of 36 percent or less. Rhode Island is the only New England state.

The testimony of Margaux Morisseau, mentioned above.

Also presenting testimony in favor of reigning in the payday lenders were the Rhode Island United Way, Rhode Island Kids Count and the Capital goods fund.

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