Lohr, Saxman won over by lobby money?
Posted by Brent Finnegan on February 5th, 2007
Waldo Jaquith made a chart displaying a breakdown of the Ware Payday Loan Act McClellan Amendment vote; the yays and nays according to who received money from the loan industry. This amendment would cap predatory payday lending rates at 72 percent, instead of the current 780 percent they are currently allowed to charge.
Delegates Lohr and Saxman could have followed fellow Valley Republican Steve Landes‘ lead, and voted for the amendment. Instead, Lohr (who received $2,000 from the payday loan industry) and Saxman (who received $3,269) voted No.
One could argue that they could have voted No without any money from the loan lobbyists (after all, Todd Gilbert only got a measly $250, and he voted against it, while Landes also received more money, yet voted for it). But you can’t say they didn’t know that this practice greatly benefits the loan companies (many of them owned out-of-state) while overcharging and damaging the credit of their constituents. I’ve emailed Lohr about this, and I find it hard to believe that Stephen Winslow hasn’t talked to Saxman about it. There’s no way they can claim ignorance on the issue.
Someone should do a t-test or something to see if there is a statistical difference in this fact:
Average donations from “Yes”: $1,571 (Standard deviation $2,878)
Average donations from “No”: $1,105 (Standard deviation $2,090)
So, higher average and more more variance for Yes. But is it statistically significant? Who are our statisticians?
Like I said, assuming they received no lobby money, why did they vote no? Was a no vote in the best interests of their constituents, or these predatory lenders?
While it seems that no one could reasonably oppose attempts to stop “predatory” ***evil*** lending, there may be another angle that you are missing. The legislators you mentioned claim to be generally in favor of free markets. (Please don’t bombard me with counter-examples.)
If, the argument goes, two parties agree to a contract that provides for the payment of 500% interest, why should the government step in and prohibit that? Surely the debtor has the option to not enter the contract. Why should we let the government tell us what contracts we can and cannot make?
I hope you don’t consider this bombardment, and I hate to plagiarize, but Stephen said it best when :
He points out that the problem is the repeat borrowers. It’s like heroin: there is a demand for both. Heroin is illegal because it’s damaging to the user and to society. At the very least, payday lending needs reform. 72 percent is not that low.
My point is simply this: elected representatives should always be looking out for the best interests of the people in their district. Who benefits if the industry remains unreformed, with no self-regulation? Who loses?
No, finnegan, I meant bombardment regarding prior anti-free-market votes from our delegates.
You were asking, though, if there are any other explanations for a “no” vote other than vote-buying.
So why a cap at 72%? Isn’t that predatory as well? Why not 6%?
“If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest.”
Exodus, 22:24
I think 72 percent is double what they’re allowed to charge military personnel. Don’t ask me why they doubled it.
The fact that they would not want to cap it at the high rate of 72 is baffling to me.
There is, apparently, a market for payday lending. There is a number, however, at which it will dry up — lenders will no longer be willing to accept the risk and lend short term (high risk, I assume) money if the cap were, say, 2%. Do we know what that number is? Is it higher or lower than 72%? Do we want to eliminate the payday lending market altogether? Maybe we do, but it seems that any adjustments to the market need to be grounded in some sort of economic research (including an analysis of collateral effects), not just numbers pulled out of — the air.
Perhaps there is such a study — has anyone seen one?
Well, it seems that Del Ware pulled the bill anyway. I wonder what sort of pressure he was under behind closed doors. Apparently they were dumping tons of bills yesterday.
I hope Kaine intervenes to save Saslaw’s bill. That at least would be some small token of reform.