In recent years, state legislatures in the South and elsewhere across the country have taken steps to crack down on predatory lenders -- payday advance companies, title loan firms, and other outfits that charge borrowers exorbitant interest rates sometimes as high as 36 percent. Last year alone, for example, more than 100 bills pertaining to such lenders were introduced in 33 states.
But the industry is mobilizing to protect its interests by boosting political donations to state lawmakers.
So reveals a new report from the National Institute on Money in State Politics. "With Interest" found that in the 2006 election year cycle, predatory financial services companies contributed more than $6.2 million to state candidates and party committees.
That's close to double the 2004 total of about $3.2 million -- which in turn is more than twice the 2000 total of $1.5 million.
And of the 10 states that were the top recipients of payday industry contributions from 2000 to 2006, half were in the South.
The most dramatic increase in the industry's contributions in the region -- an eye-popping 2,099 percent -- occurred in Georgia, where the industry boosted its spending over the six-year period from $33,740 in 2000 to $742,054 in 2006. After Georgia legislators banned payday lending in 2004, two bills were introduced in 2007 and 2008 to repeal the law but both of them failed.
Elsewhere across the South, Texas saw a 970 percent increase in campaign contributions from predatory lenders during the period to $365,384; Florida, a 337 percent increase to $816,880; South Carolina, a 322 percent increase to $245,040; and Tennessee, a 277 percent increase to $205,575.
(Map from Page 11 of "With Interest"; click for larger version)
But the industry is mobilizing to protect its interests by boosting political donations to state lawmakers.So reveals a new report from the National Institute on Money in State Politics. "With Interest" found that in the 2006 election year cycle, predatory financial services companies contributed more than $6.2 million to state candidates and party committees.
That's close to double the 2004 total of about $3.2 million -- which in turn is more than twice the 2000 total of $1.5 million.
And of the 10 states that were the top recipients of payday industry contributions from 2000 to 2006, half were in the South.
The most dramatic increase in the industry's contributions in the region -- an eye-popping 2,099 percent -- occurred in Georgia, where the industry boosted its spending over the six-year period from $33,740 in 2000 to $742,054 in 2006. After Georgia legislators banned payday lending in 2004, two bills were introduced in 2007 and 2008 to repeal the law but both of them failed.
Elsewhere across the South, Texas saw a 970 percent increase in campaign contributions from predatory lenders during the period to $365,384; Florida, a 337 percent increase to $816,880; South Carolina, a 322 percent increase to $245,040; and Tennessee, a 277 percent increase to $205,575.
(Map from Page 11 of "With Interest"; click for larger version)
Do we think those kind of lending institutions are helpful in the economy? How about its business operation in which some said a kind of burden on the borrowers? The American political climate, which had been so optimistic of late, has started to get ugly again. Illinois governor Rod Blagojevich has likely seen his last payday for awhile, along with his chief of staff, John Harris. Both were arrested by the FBI on federal corruption charges on Tuesday morning. His predecessor, George Ryan, was arrested a few years ago, on corruption charges as well. Blagojevich evidently assumed that he was King of Illinois and was trying to literally sell the Senate seat recently vacated by Barack Obama. According to Illinois law, the governor determines who fills the seat, and Blagojevich figured that it was a quick way to make a buck or two. Well, it would be an understatement to say he got a little greedy. The FBI compiled a 76 page indictment against Harris and Blagojevich. He was caught on wiretap last month, and the FBI waited to get even more evidence against him, which they did. He claims that everything he did and said was legal. Click to read more on Blagojevich courtesy of Personal Money Store's Payday Loan News.
December 13, 2008 3:35 AM | Reply