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Thursday, February 8, 2007

Petitioning the Governor

posted by on February 8 at 13:13 PM

More than 60 leaders representing minority communities signed a letter that was hand-delivered to Gov. Gregoire today by a group called CAPP—Communities Against Payday Predators.

The letter, cc’d to members of the legislature, asks the governor to support HB 1020, which would put a cap of 36% annual interest on payday loans.

February 8, 2007 Dear Governor Gregoire, As leaders in communities of color, we are writing to express our deep concern over predatory payday lending and urge you to extend to all families the same consumer protections that military families will receive under federal law. We are troubled that payday loan shops are proliferating in our neighborhoods. Payday lenders drive working families deep into debt by charging outrageous interest rates, with a repayment system that is set up for families to fail. With a typical interest rate of 391% on loans that have to be paid in-full in two weeks, it is no wonder that over 90% of borrowers are forced into having five or more loans a year. In 1995 the state legislature legalized payday lenders, creating a loophole through which the industry can operate outside of the rules that guide the practices of other financial institutions. In 10 years, payday lending in Washington State has grown to a $1.4 billion industry, issuing over 3.5 million loans in 2005. This fast growing, highly profitable industry is reaping profits from our communities while undermining the ability for families to thrive. Last year Oregon passed tough protections by capping interest rates and currently 11 states effectively ban predatory payday lending. Last fall the Republican Congress and President Bush capped the interest rate on payday loans to military families. We ask that you extend these reasonable and fair consumer protections to all payday loan borrowers. These protections include: ? Capping the annual interest rate on payday loans at 36% ? Prohibiting the use of post-dated checks or electronic access to bank accounts ? Eliminating mandatory arbitration clauses from loan agreements We are asking you to protect the interests of communities of color by throwing your full support behind HB 1020. House Bill 1020 provides protections that will place barriers between our communities and financial failure.
Speaker of the House Frank Chopp (D-43, Seattle) was asked about the payday loans cap at his press briefing yesterday, and he didn’t seem too enthusiastic about its chances of passing out of the Financial Services and Consumer Protection Committee, which is chaired by Rep. Steve Kirby (D-29, Tacoma. As we’ve reported, Kirby is a big recipient of political contributions from the payday loans industry. He says he’s not even considering the bill.

I’ve included the list of signers below.

Footnote #1: No Ron Sims?

Footnote #2: With CO2 caps, payday loans caps, and condo conversion caps in play this session, the GOP should start spoofing the Democrats as the party that wants to put limits and caps on everything. Maybe the GOP should float a bill calling for a cap on legislation mandating caps.

Footnote #3: As Angela reported this morning, there’s an initiative in the works to cap the interest on payday loans as well. (She’ll have more on that this aftenoon).

Julieta V. Alberto, Filipino Senior Meal Site, Korean Women’s Association
Sylvia Arthur, Coordinator, Thrivers – Jefferson County
Michael T. Bell, Point Hope
James Bible, Esq., President, NAACP – Seattle/King County
Juan Jose Bocanegra, Every Workers Movement
Rev. Dr. Leslie D. Braxton, Pastor, New Beginnings Christian Fellowship - Renton
Stella Chao, Seattle
Cheryl Cobbs, Executive Director, Solid Ground (formerly Fremont Public Association)
Antonio Cube, Legislative Director, Washington State Catholic Conference
Sun B. Dang, Korean Women’s Association of Pierce County
Janice Deguchi, Minority Executive Directors Coalition
Reueta L. Doiron, Executive Director, Samoan Family Support Services of Pierce County
Cynthia G. Domingo, Legislative Aide to King County Councilman Gossett
Lynn Domingo, Legacy of Equality, Leadership and Organizing
Dorry Elias-Garcia, Executive Director, Minority Executive Directors Coalition
Edith Elion, Executive Director, Atlantic Street Center
Jaime Garcia, Executive Director, Rainier Valley Community Development Fund
Larry Gossett, Chair, Martin Luther King County Council
Richard Gurtiza, President, Filipino American Political Action Group of WA
Soon Han, Program Manager – Health Care, Korean Women’s Association
Helen Howell, Former Director, Department of Financial Institutions
Candace Inagi, Manager of Government and Community Affairs, SEIU 775
Pramila Jayapal, Executive Director, Hate Free Zone
Sarah Kim, Program Manager – Senior Day Care, Korean Women’s Association
Elaine Ko, Executive Director, Inter*Im Community Development Association
Ben Kodama, Commissioner, King County Agriculture Commission
InSun Lee, Korean Women’s Association
Tony Lee, Founding Member, Asian Pacific Islander Coalition
Paola Maranan, Executive Director, Children’s Alliance
Mauricio Martínez, Community Relations Specialist, King County Executive’s Office
Louise J. McKinney, Director, Boys to Men Ministry
Rev. Dr. Samuel B. McKinney, Pastor, Mt. Zion Baptist Church – Seattle
Juliana A. Merafuentes, Pierce County Aging and Long Term Care
Jesse Miller, Vice-Chair, Statewide Poverty Action Network
Diane Narasaki, Chair, Asian Pacific Islander Coalition – King County
Jane Narr, Fund Developer, Korean Women’s Association
Mai Nguyen, Minority Executive Directors Coalition
Phuc H. Nguyen, Vietnamese Community for Mutual Support – Pierce County
David Northover, Yakama Indian Nation
Mark Okazaki, Chair, Asian Pacific Directors Coalition
Mario Paredes, Executive Director, Consejo
Marline Pedregosa, President, Asian Pacific American Labor Alliance
Darren Pen, President, Khmer Community – Tacoma
Lua Pritchard, Chair, Asian Pacific Islander Coalition – Pierce County
Lyle Quasim, Pierce County
Frank Reynolds, Native Coalition
Norman B. Rice, Former Mayor, City of Seattle
Tania María Rosario, Vice-President, Latino Political Action Committee
Sylvia Sabon, Board Member, Welfare Rights Committee
Sergio Salinas, President, SEIU 6
Roland Santos, Fil-Am, Tacoma/Pierce County
Wanda Saunders, Legacy of Equality, Leadership and Organizing
Aiko Schaefer, Director, Statewide Poverty Action Network
Frederick Simmons, Coalition of Black Trade Unionists
Kip Tokuda, Former Representative, 37th District, Washington State
Ligia M. Velázquez, President, Labor Council for Latin American Advancement – WA State
Venus Velázquez, Seattle
Velma Veloria, Former Representative, 37th District, Washington State
Ronald R. Ward, 2004-2005 President, Washington State Bar Association
Verlene Wilder, President, A. Phillip Randolph Institute – Seattle Chapter

RSS icon Comments



Posted by Will in Seattle | February 8, 2007 2:11 PM

Let's do a little math here:

$500 loan
term : 1 week
interest: 36% annually -> 0.69% per week, less if it's compound interest.
$500 * 0.69% = $3.46.

Can a payday lender actually be profitable making less than $4 on every loan?

I'm not saying that triple-digit interest is fair, I'm just saying that 36% seems awful low. Anyone know where this number comes from?

Posted by MHD | February 8, 2007 2:42 PM

I don't mean to claim I know much about the economics of the industry, I'm just asking.

Posted by MHD | February 8, 2007 2:45 PM

The caps that the Stranger staff are drooling all over will kill the payday loan business. There is no doubt about it. Now, has anyone polled their customers, the people that these laws are supposed to "protect," and asked how they feel about payday loan companies being put out of business?

There's nothing quite so ironically stupid as people making laws to protect stupid people from doing stupid things to themselves.

Well, at least this will open up job opportunities for leg-breakers.

Posted by BC | February 8, 2007 4:19 PM

Payday Loans
Online Loan Resources, personal Loans ofall types, payday cash advance lenders. Click here for immediate funding.

Posted by Lawrence | February 20, 2007 1:51 PM

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