Public Campaign issued a new report today, "Indebted: How Payday Lenders Buy Political Influence In Missouri And Hurt Everyday People," which details how the payday lending industry's influence over the Missouri state legislature and how it effects ordinary citizens.
Here's the executive summary (and scroll down to download the full report):
The payday lending industry profits by targeting low-income families and generating a cycle of debt that exacerbates economic hardship. In order to continue to thrive and minimize regulation in states, the industry has used campaign contributions and lobbying to build relationships with state legislators. This pattern is particularly evident in Missouri, which trails the nation in payday industry regulation.
In the absence of legislative action to regulate a usurious industry, Missouri citizen groups have been organizing to place and pass a measure on the November ballot that would cap payday annual interest rates at 36 percent. In response, the payday industry has also mobilized money outside the legislative process, setting up fundraising committees, including the shadowy Missourians for Equal Credit Opportunity, whose money from hidden donors dwarfs the funds raised by citizen groups.
Public Campaign took a close look at the payday lending industry’s political and financial strategies to influence state policymakers over the last decade, along with some of their efforts to defeat this year’s ballot initiative effort. This is a classic case of an industry spending big money in politics to look out for their business interests with severe costs to local people.
- The payday lending industry has spent more than $1 million over the last decade to influence Missouri state elections. Lobbyists and lobbying firms working for the industry have given at least another $648,460 to state campaigns.
- Campaign spending by the industry hit a decade high in the 2010 cycle, with at least $371,483 in contributions to Missouri politicians, four times more than in the beginning of the decade.
- QC Holdings is the biggest campaign donor in the industry, spending at least $343,362 between the 2000 and 2010 cycles. QC Holdings operates the most payday stores in the state and receives more of its national gross profit from Missouri residents than any other state.
- The top recipient of payday industry campaign money has been the industry’s champion for keeping interest rates high. State Rep. Steven Tilley (R-106), the current House Speaker, received $40,375 between the 2000 and 2010 cycles and at least another $32,150 in 2011.
- In 2011, the Missouri House passed a bill that benefitted the payday industry by “capping” annual interest rates at 1,565 percent (HB 656), a hundred times higher than many credit cards. Members who voted for this pro-industry bill received nearly three times more payday money on average and nearly five times more altogether than members who voted in opposition.