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Tuesday, January 9, 2007

Payday lenders hijack Latino lobby

posted by on January 9 at 13:25 PM

The debate over proposed legislation that would cap interest rates on payday loans has driven a wedge between two opposing sides of Latino activists and leaders. Take for example this recent switcharoo: The Hispanic Legislative Day, a strangely named organization that puts forward a list of Latino priorities for the state legislature, voted late last year to add the payday cap to this session’s list of to-dos. The group assigned the task of writing an opinion paper to Ligia Velazquez, the president of the Labor Council for Latin American Advancement. Velazquez brought her draft to a meeting last Saturday, expecting those gathered to vote to accept the document or approve revisions. Instead, the group voted to take the cap off their list of priorities. Velazquez felt like the meeting had been stacked. In attendance were two Latino employees of MoneyTree, a local payday lender. One of them, Dan Gandera, voted to boot the cap. The way it’s been explained to me, any member of the “Latino community” is eligible for membership and voting privileges at the Hispanic Legislative Day. But Velazquez says Gandera—who works as a lawyer for MoneyTree—has an obvious conflict of interest. She described MoneyTree’s influence as a hijacking. The company has donated to Latino politicians, including State Sen. Margarita Prentice (D-11), who opposes the cap. CEO Dennis Bassford has also said he would like to find a way to give money to El Centro de la Raza, a prominent Latino nonprofit. More on their strategy here.

Update: I just talked to the director of Hispanic Legislative Day, Carlos Jimenez. He said the incident needs to be used as a learning experience. “The other side of this issue, they are well-organized,” he said. “We need to get organized and we need to be persistent.”

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How many members does this group have? How can it be at all representative if two extra people showing up can hijack a vote?

Posted by Noink | January 9, 2007 1:46 PM

The poor are too stupid to be trusted to make their own decisions when it comes to borrowing and spending money. Smarter and wealthier people should decide for them not only when and how they can borrow money, but how they can spend it. This could easily be done by the state issuing ration books based on income and real assets for the purchase of luxury goods like cigarettes, beer, movie tickets, clothing, luxury foods and automobiles, or leasing mid to high cost apartments. The provision of these items to individuals without adequate rations in their book would be a criminal offense. We did this (with different eligibility criteria) to everyone’s discretionary spending during WWII. Just think, if we could outlaw poor people from spending money they don’t have on things they don’t need, then they wouldn’t even want payday loans. Its really the very least any Nanny State could be expected to do.

Posted by You_Gotta_Be_Kidding_Me | January 9, 2007 1:57 PM

I should add: Velazquez said the people from MoneyTree appeared to have called out their troops. Sounds like they encouraged members who support their side of the debate to show up at the meeting. The other side, believing the battle was already won, didn't make as strong a showing.

Posted by Angela Valdez | January 9, 2007 1:58 PM

You Gotta - so you're in favor of predatory loans? You want loan sharks to be legal? Do you believe as long as a business is registered or incorporated, everything it does is perfectly legal and moral, and government should have no role in protecting the business's potential victims, because they ask for it?

Posted by him | January 9, 2007 2:26 PM

Political organizing isn't illegal--in fact, when it's to push a cause the Stranger supports, your paper seems to be in favor of it.

Posted by J.R. | January 9, 2007 3:14 PM

Depress wages by killing unions. Reduce the public schools to babysitting services for shitty parents who should never have reproduced. Drive up the price of everything. Then sit back and open up legalized loan shark operations. Brilliant.

How anyone could work for one of those immoral organizations is beyond me.

Posted by Sad to see America Sinking into irrelevance | January 9, 2007 3:35 PM

You gotta- It is not that poor people are stupid as you suggest, they are vulnerable. Living paycheck to paycheck is no day in the park, any unplanned expense (medical bill, repair bill for your car) can put you at the mercy of people that think that charging 400% interest is fair because you 'are making a choice' to do so.

Is it really a choice? Is this what it's come to? Do I really need to choose between buying my child's medication or paying ridiculous interests rates?

Posted by LM | January 9, 2007 4:44 PM

Washington Mutual is far more dangerous with credit card bill at 29 per cent than all these fly by nights put together.

Bank are all greedy corporate pigs.

Why the attacks at pay day stations -- class.

Middle class white people don't see themselves in this picture. Noblesse obliege.

Bank of America charges 5.00 to cash a paycheck which can be cashed at Check Mart for less than 4.00 --- Oh, scusea me - Check mart is the villan.

Posted by sammy | January 9, 2007 4:51 PM


Clearly you missed the point of my post. Outlawing Predatory Lenders only addresses the symptom (Predatory loans), not the cause (spending beyond your means). If you accept that the State has the right to dictate what interest rate you as a free individual may or may not choose to borrow money at, then it seems reasonable that the State has the right to dictate how you spend your money. Forced fiscal responsibility would eliminate the cause of the symptom (and thus the symptom) instead of just dealing with the symptom and leaving the cause unresolved. Provide everyone with a ration book that limits their actual spending to their actual ability to pay and why would anyone borrow at predatory rates? (They would have no use for the funds.) If the State doesnt have the right to implement this solution to protect an individual from his/her own free will in entering into financial transactions, then I would question if it has the right to implement other protections against that free will.

When I was young, poor (and stupid) I took an occasional Payday Loan. They were never (strictly speaking) necessary in that if I had stopped smoking & drinking and moved to a part of the region I could afford to live in (and stopped partying every night) I would not have needed them. They were just the facilitators to my lifestyle for a period of time when my lifestyle was occasionally more expensive than what I could afford. Big Tobacco, Neighbors, The Brass Connection, Tuggs and every restaurant on Capitol Hill (along with an occasional drug dealer) got all of my Payday Loan money. But it was my right to take those loans (even if it was stupid of me to do it). It was my life to fuck up. None of the States damn business. Today Im none the worse for it.

Posted by You_Gotta_Be_Kidding_Me | January 9, 2007 4:54 PM

LM - No, the choice you made was to have (and keep) a child you obviously can not afford. Not a very responsible action. But then, who's responsible for their actions these days?

Posted by You_Gotta_Be_Kidding_Me | January 9, 2007 4:58 PM

You presumtious S.O.B, that was given as an example and you are the poster child for blaming the victim.

Posted by LM | January 9, 2007 8:08 PM

So because some self-absorbed fag supposedly cleaned up his act, that excuses the whole payday loan industry?

What a jerk

Posted by You're kidding nobody | January 9, 2007 8:39 PM

If Prentice or El Centro step up and provide cover for these loan sharks, please make sure to report that. That would be important, not totally surprising, and sad news.

Posted by wf | January 9, 2007 11:02 PM

@11 No, I just believe that my actual experience is more relevant than your hypothetical.

@12 - Fact is, I am not so arrogant as to suppose I am any more capable than anyone else, and if I can be trusted with the responsibility of borrowing money for short durations at high interest rates, then so can any other consenting adult. This is the problem with Liberalism. It demands that a Nanny State protect every individual from him/her self by stripping the rights of individuals while absolving them of responsibility for their actions under the assumption that they can not make good decisions for themselves.

Posted by You_Gotta_Be_Kidding_Me | January 10, 2007 8:38 AM

Prentice already has. It has been reported widely in the past, and is always her bill that practically gurantees that they can operate here. A bill, she is quite proud of. El Centro as a non profit just wants the dough, and I reckon I can understand that as a former non profit employee, but it is rather hypocritical for them to talk about struggle and civil rights when taking money from Loan Sharks. Their union busting past doesnt help either. The sad thing is that they dont need it, and they are not one of the poorer non profits. They are for the most part well runned and get money from tons of different sources.

Posted by SeMe | January 10, 2007 11:30 AM

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