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Populist messaging, auditing the Fed, payday loans – Daily Kos

By Rachel Goldfarb, originally published on Next New Deal

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How Democratic Progressives Survived a Landslide (TAP)

Bob Moser says that populist, localized campaign messages, not the party’s own turnout strategy, saved a few key Democratic races in the 2014 midterm elections.

After every election, the losing side naturally tends to brood over where and how things went wrong. For Democrats this year, there’s no shortage of theories about the party’s avalanche of key losses in Senate, House, and statehouse contests. Perhaps it was wrong to sideline President Obama so thoroughly. Perhaps they shouldn’t have run away from the Affordable Care Act. Perhaps they still haven’t found the formula for turning out young and minority voters in midterms. Maybe it was just a bad map that couldn’t be overcome. Or maybe there had been, as the pundits chorused, no “coherent national message” for Democrats to run on.

You can find shards of truth in these tidbits of conventional wisdom, but it’s a gauzy, overgeneralized kind of truth. It’s more instructive to take a long look at what did work in 2014—at the candidates and campaigns that overcame the Republican drift. How did Democrats beat their odds in Arizona, Minnesota, New Hampshire, and Michigan even as they fell short in Iowa, Wisconsin, Florida, and Colorado? The closer you look, the clearer the picture becomes: They did it the way Kirkpatrick did. They ran with their populist boots on.

Roosevelt Take: Moser references Roosevelt Institute Senior Fellow Richard Kirsch’s post-election analysis on winning populist messaging.

Follow below the fold for more.

What ‘Audit the Fed’ Really Means – and Threatens (WSJ)

Robert Litan explains that Senator Paul’s proposal calls on Government Accountability Office economists to go outside their expertise to report on the Fed’s activity and minimize its independence.

Payday Loans Are Bleeding American Workers Dry. Finally, the Obama Administration Is Cracking Down. (TNR)

Danny Vinik breaks down how payday loans harm consumers: the initial loan might not be so bad, but the repeated roll-overs have a high cost. Limiting those roll-overs is one potential regulation.

The “War on Women” is a Fiscal Nightmare: Taxpayers on the Hook for Millions as Republicans Gut Family Planning (Salon)

Katie McDonough looks at Kansas as an example of where legal fees to fight for potentially unconstitutional abortion restrictions and cuts to family planning services create massive costs.

Is Republican Concern About Middle-Class Wage Stagnation Just a Big Con? (MoJo)

Kevin Drum doesn’t think this is a sign of Republican reformers succeeding in shifting the party in a populist direction, and says that the more likely explanation is an attempt to defuse Democrats.

New on Next New Deal

The Politics of Responsibility – Not Envy

Roosevelt Institute Senior Fellow Richard Kirsch argues that voters are responding not to envy, but to the knowledge that everyone needs to take a fair share of responsibility for shared prosperity.


Ruben Diaz Jr. slips Carl Heastie cash at Sharpton event

Carl Heastie’s new job as ­Assembly speaker is already paying off.

At the end of a meeting of the National Action Network in Harlem on Saturday in which Heastie waxed poetic about renewed focus on Albany ethics — and as the Rev. Al Sharpton pressed his high-profile guests for donations — Bronx Borough President Ruben Diaz Jr. slipped Heastie a wad of cash.

But it wasn’t your typical Albany payoff. It was just Diaz trying to save his fellow Dem from looking ungenerous.

The two pols were seated next to each other on stage when Sharpton, as he usually does after his Saturday speeches, called out for handouts like an auctioneer.

As people began tossing money into a wicker collection basket in front of the stage, the new speaker seemed to come up empty-handed.

At that point, Diaz divided the bills he had clumped in his own fist, discreetly handing half of the cash to his pal.

Diaz wouldn’t disclose the amount of the impromptu loan — the bills looked likely mostly ones and fives — but it seemed like he might forgive the debt.

Sharpton (left) gives Heastie a hug at the Nation Action Network in Harlem.Photo: R. Umar Abbasi

Asked if Heastie would be repaying him, Diaz chirped: “He doesn’t have to. He’s a great guy! Everybody knows who he is so he’s good for it.”

Fortunately for Heastie, an accountant by trade, he won’t have to list the loan on his annual financial -disclosure forms since it was likely smaller than $1,000.

One thing that is known about the donation is it’s going to a non-profit that, according to 2013 records, is saddled with more than $800,000 in unpaid taxes and led by a preacher who owes $3.77 million in federal and state taxes.

The payoff came the same morning Heastie was making his first public address since he was sworn in Tuesday as speaker, following the ouster of Sheldon Silver, who has been indicted by the feds on bribery charges.

It also came as he trumpeted a panel he formed to hire an Albany ethics watchdog.

A group of six Assembly members will lead a national search for an executive director of the new Office of Ethics and Compliance, according to Heastie.

The panel includes Republican Assemblywoman Janet Duprey. Duprey was the subject of an ethics complaint last election when her opponent accused her of bullying rival supporters.

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Investor Income Properties Launches 50% Non-Recourse Loans for Select Properties


View photo.Description: Investor Income Properties has secured non-recourse financing for it’s investors to purchase immediate cash flow investment property. The properties provide immediate cash flow with cash on cash returns in excess of 20%. Property Management and tenants are already in place and for a limited time Investor Income Properties will provide one year of free property management.Investor Income Properties (IIP) has officially launched a loan program for select investment properties that is now available to investors. IIP has secured financing terms with a lender that will fund 50% of the purchase price of a investment property with the investor providing the other 50%. Multi-property buyers are eligible for up to 65% LTV. For a list of properties available for non-recourse financing go to Rom, President of IIP says “We are delighted to now offer loan programs to our investors both in the United States and Internationally. By offering this type of financing, investors are now able to increase their purchasing power by as much as 65%, add a better asset class to their investment portfolios and substantially increase their cash on cash ROI.”With recent stimulus news coming from the Cleveland area now is the perfect time to invest. 1. Lebron James announces he is returning to Cleveland No mistake about it, Lebron James is currently the most powerful and economically influential superstar in all of America – he brings money to the area/state and is personally interested in helping to revive Northeast Ohio; where he grew up. Provided below are links which show just how he massively impacts economies. 2. The GOP (Republican National Convention) recently named Cleveland as their Headquarters for the 2016 U.S. Presidential Election. This decision states that they deem Cleveland and Ohio as the most important geopolitical area in all of the U.S. for the Presidential election! Provided below are links which show where Cleveland’s economy is headed., OH is being described as “In the midst of a renaissance – a city in revival” by Meet the Press and other national pundits.IIP currently has a large portfolio of properties that are fully renovated and tenanted, which are immediately available to investors for sale individually or as a bulk purchase. IIP offers low cost, high yield properties on an all cash basis that typically sell for between $30,000 to $60,000 and offer an attractive 12 to 20% annual cash return. IIP now offers higher asset classes priced between $60,000 to $150,000 with 50-65% non-recourse financing and cash on cash returns in excess of 20%.
For a limited time IIP will provide free property management services for 1 year. Contact Information:Investor Income PropertiesCorporate Office:621 NW 53rd StSuite 240Boca Raton, FL 33847Phone: SOURCE: Investor Income Properties ### FinanceLebron James

Payday Loans With Four-Digit Interest Get Thumbs-Up From Some …

Image payday-loans-sky-high-interest.jpg

Payday loans function as the last resort for Americans in tough economic times to get a quick infusion of needed cash for overdue bills, sudden medical expenses — or even to buy a gift for a loved one on a birthday or anniversary. But payday loans, from lenders who generally operate out of no-frills storefronts in lower-income and poor neighborhoods, can create more far worse problems than they solve with massive interest rates that would make even the big credit card companies ashamed.

That is why payday loan companies are often referred to as “predatory lenders.” They prey on the desperation of hard-working people who still can’t make ends meet thanks to poor wages from low-paying jobs.

Now lawmakers in two states want to give predatory lenders even more liberty to charge debilitating interest rates to borrowers who often are out of options simply to keep the lights on.

Over the next decade, experts project that one of every four Americans will be stuck in a low-wage job, the kind that though it requires full-time hours, pays an hourly rate at or below the federal poverty level.

That’s where payday loans come in — taking advantage of people who need cash fast and have no other legal way to get it. Each year, about 12 million people take out payday loans according to one recent study.

A different study looked at why individuals take out payday loans. The number one reason, at 69 percent, was simply to pay regular bills. After that, in a distant second place with 16 percent, were people who take out payday loans to cover unexpected emergencies. Paying for special occasions was third, with only eight percent resorting to payday loans to pay for gifts, vacations, and so on.

In other words, seven out of 10 payday loan borrowers, or about 8.4 million Americans, resort to payday loans simply to make ends meet. And each one of those Americans will pay the payday loan company $520 in interest and other fees for every $375 he or she borrows — an effective interest rate of 1,387 percent.

While paying that much interest can be crippling for families with no other options than to take out payday loans, lawmakers in at least two states are pushing to allow those interest rates to soar even higher.

In Pennsylvania, which is one of 15 states that currently ban payday loan companies by capping interest rates at 24 percent, Republican legislators Chris Ross and Pat Browne have introduced a bill to lift that cap.

In Missouri, rates are now capped at 75 percent of the total loan — an effective annual interest rate of 1,950 percent for a two-week loan. Republican State Senator Mike Cunningham has introduced a bill to lift that limit — in a state where 2.34 million payday loans were issued in 2012.

On the other hand, in Alabama, several pieces of legislation from both Republicans an Democrats aim to place caps on payday loan interest rates at rates ranging from 30 percent to 36 percent annually.

But the lenders complain now that if rates are capped, they won’t make enough money.

“It would be virtually impossible for us to operate a storefront at that rate,” Buck Wilson, of Modern Financial Services — a group that represents the interest of payday loan companies in Alabama — said, warning that desperate borrowers would then be sent into the hands of illegal loan sharks, who are the main competition in the payday loans industry.

[Images: Shaun Wilkinson / Shutterstock and taberandrew via photopin cc]


Running mate’s loan to Sam Brownback’s campaign ignites debate

Kansas Lt. Gov. Jeff Colyer?s recently revealed $500,000 loan to Gov. Sam Brownback?s re-election campaign was a sign of: a) confidence, b) desperation, or c) the times.

Republicans and Democrats spent the last week arguing over the first two possibilities.

National campaign finance experts, though, said Colyer?s New Year?s Eve loan ? which appears to be a modern-day record for a Kansas campaign ? reflects the common and growing use of personal fortunes to finance political ambitions.

It?s entirely legal. The Supreme Court has upheld unlimited personal candidate spending in federal races. Most state laws place no direct limits on what candidates can spend on their own campaigns.

But it?s also politically significant, experts said. Not counting the loan, Brownback?s 2013 fundraising total was $1.1 million, roughly equal to the cash raised by Democratic opponent Paul Davis in the last four months.

Brownback may have sought the loan, some experts said, to avoid the appearance of any problems with his campaign.

?When you?re in Brownback?s position ? a Republican governor in a Republican state ? the perception that a Democrat has pulled even with you is no good,? said Michael Smith, a political science professor at Emporia State University.

Brownback supporters insist the campaign is not in trouble. The loan, they said, simply allows the governor to take his message to voters this winter and spring.

?I am committed to Kansas and doing everything I can to serve this state,? Brownback told The Star in a brief interview about the loan. ?We?re going to run a strong campaign to continue to serve the state of Kansas.?

Experts said Brownback, and the campaign, may think the advantages of extra advertising and travel now outweigh any negative perception that follows the loan. With arguably weak poll numbers for an incumbent, Brownback could use the loan to help convince potential donors that his campaign remains formidable.

?The Colyer contribution was an effort on the part of the Brownback campaign folks to plump up his war chest and make clear that Davis? efforts weren?t going to upset the re-election apple cart,? said Washburn University political science professor Mark Peterson.

Such loans have become commonplace.

In 2012, for example, federal candidates spent $130 million of their personal fortunes on their campaigns, according to the Center for Responsive Politics.

In 2010, according to the National Institute on Money in State Politics, the top 10 self-funders in state races spent a quarter of a billion dollars on their campaigns. That?s an average of 83 percent of all the funds those candidates were able to raise.

Colyer?s $500,000 loan, by contrast, represented roughly 33 percent of all 2013 fundraising by the Brownback-Colyer ticket.

Some critics worry about the growth of self-funded campaigns.

Donors are often asked to repay outsized campaign loans, they say, making lobbyists and special interests the guarantors of an office-holder?s personal debt.

Congress tried to limit the practice in the McCain-Feingold campaign finance law for precisely that reason, said Michael Malbin of the Campaign Finance Institute.

?Contributions, in effect, were going directly into the candidate?s pocket,? he said. ?They were being given by donors who were not interested enough in the election to give to the campaign ? they were only interested in giving to a winner after the fact.?

Under current law, federal candidates can lend themselves as much as they want. But they can raise only $250,000 after the election to repay those loans.

?Outstanding personal loans worth more than that must be settled with the FEC?s approval,? the Center for Responsive Politics says.

Other critics worry huge personal fortunes can distort campaigns, making it harder for less wealthy candidates to keep pace.

?The self-funder has all this money to run attack ads on the other candidate, which puts pressure on the non-self-funding candidate to spend even more time raising money,? said Viveca Novak, a spokeswoman for the CRP.

Others, though, say unlimited self-funding can actually help democracy by allowing wealthy candidates to challenge well-financed incumbents, and by freeing them from dependence on ? and at least the appearance of an obligation to ? special interest groups.

?This person is not beholden to any campaign donors except themselves,? said Mary Boyle, a spokeswoman for Common Cause, a campaign finance watchdog and public interest group.

Kansas law doesn?t limit what a candidate can give or lend to his or her own campaign, and some candidates have been eager to spend. In 1990, for example, Wichita Realtor Nestor Weigand provided more than $300,000 to his losing primary campaign for governor.

The Brownback campaign committee isn?t required to publicly disclose the terms of the Colyer loan ? its length or any interest rate. Had the loan come from a bank, the terms would be public.

In other states, candidates have loaned themselves money at substantial interest, essentially earning money on their self-financed campaigns. But David Kensinger, a spokesman for the Brownback campaign, said no interest will be paid to Colyer.

?This is,? the aide said in an email, ?part of his commitment to the campaign.?

Additionally in Kansas, if an outsider loans money to a campaign committee, it must be repaid before the election, or it becomes a contribution. Contributions are capped at $2,000 for the primary and another $2,000 for the general election for statewide offices in Kansas.

Any unpaid loan in excess of those limits would be illegal, said Kansas Ethics Commission director Carol Williams.

But because Colyer is a lieutenant governor candidate, linked with Brownback by law, his loan to the campaign committee can be carried without penalty until the committee closes.

Until the committee closes, though, Brownback and Colyer can raise money to help retire the debt. And, if the ticket is re-elected, contributors would know their money isn?t going for campaign signs and TV ads, but to repay the campaign?s debt to the lieutenant governor.

Boyle, with Common Cause, called that troublesome.

?When people give money to a candidate, they generally believe in that candidate,? she said. ?Giving someone money to pay back a loan, after they?re in office, is a very different story.?

Colyer could forgive the debt and take the loss. Again, because he is on the ticket, the remaining principle would be considered a self-contribution and therefore would not be limited.

The conversation surrounding the Colyer loan did prompt Democrats and Republicans to scour both candidates? latest financial disclosures, seeking patterns from the donations each received.

Paul Davis reported raising a little more than $1 million in 2013 for his race. No loans were reported, although Jill Docking, his pick for lieutenant governor, gave $2,000. Other members of the extended Docking family contributed to the campaign as well.

He did raise significant contributions from the legal community and from organized labor, including the Teamsters, Locomotive Engineers, and the Plasterers and Cement Masons, who gave the maximum $2,000.

Major individual donors include Tom McDonnell, president and CEO of the Kauffman Foundation; and former U.S. Rep. Jim Slattery, who each gave $2,000. Alan Rupe, a lawyer representing students suing the state for inadequate funding, gave $1,000, and former U.S. Rep. Dennis Moore gave $250.

The campaign, though, said voters should focus on the smaller donations. ?Paul has very strong support early in this campaign,? campaign treasurer William Kassebaum said.

Brownback reported bringing in $1.1 million from a variety of sources, including doctors, lawyers, accountants, real estate developers and business executives. And he took in money from drug companies, construction companies, wind energy interests, railroads and the aerospace industry.

Locally, prominent contributors to Brownback included Chiefs owner Clark Hunt, Royals owner David Glass and Sporting Kansas City owners Neal Patterson and Cliff Illig. Each contributed $2,000. Robb Heineman, another Sporting KC owner, gave $1,000.

The state Republican Party also dropped $30,000 into the governor?s campaign.


U.S. FHA to tap $1.7 billion in taxpayer funds

* FHA needs cash to maintain required capital cushion

* Shortfall stems from loans backed from 2007 to 2009

* Republicans: FHA was irresponsible in propping up market

* White House predicted $943 million draw in April

* Obama administration officials see finances improving

By Margaret Chadbourn

WASHINGTON, Sept 27 (Reuters) – The U.S. Federal Housing Administration said on Friday it will draw $1.7 billion in cash from the U.S. Treasury to help cover losses from troubled loans, marking the first time in its 79-year history that it has needed aid.

The agency, which offers mortgage lenders guarantees against homeowner defaults, told Congress it does not have enough cash to cover projected losses on the loans it backs. It said it needs the subsidy to shore up its insurance fund to maintain a required capital cushion.

White House officials projected in April that the FHA would face a shortfall of $943 million in the fiscal year that ends on Monday, but rising mortgage rates cut its loan volume and curbed a hoped-for increase in revenues from higher loan premiums.

FHA Commissioner Carol Galante said her agency was required to draw money based on loan performance assumptions that were locked down in December, but she said those assumptions did not capture improvements that would have likely canceled out a need for aid.

“In the next few months, we expect updated data and economic forecasts to reflect what we already know to be true – the health of the (FHA insurance) fund has improved significantly,” she told lawmakers in a letter.

The cash infusion marks what could be considered a book end to the 2007-2009 financial crisis, which started with the U.S. subprime mortgage crisis.

Most of the damage to the FHA was caused by loans that were made during those years as the real estate market cratered and it expanded its book of business to support the mortgage market. Officials said those loans are projected to cost the agency $70 billion.

Loans originated in the past few years have performed much better. The number of loans seriously delinquent at the end of July was 15 percent below the level of a year earlier and at the lowest point in almost three years.

In addition, the amount of money the FHA is recovering on foreclosed properties is up sharply. “It is estimated that the improvement in recovery rates alone is worth more than $5 billion,” Galante said.


While the FHA had been expected to draw from the Treasury, the size of the cash infusion, which Republicans have dubbed a bailout, will heighten the political tension over the government’s pervasive role in the mortgage market.

Taxpayers have already propped up mortgage finance giants Fannie Mae and Freddie Mac to the tune of $187.5 billion, although those government-controlled companies are now profitable and will have returned $146 billion in dividends to the Treasury by the end of the month.

Including Fannie Mae and Freddie Mac, federal housing agencies support about nine in 10 new U.S. mortgages.

Idaho Republican Senator Mike Crapo said the announcement reinforced the need for Congress to revamp the housing finance system to reduce the government’s footprint.

“Taxpayer liability could come to fruition if we do not act on serious reform now,” he said.


The FHA said it has more than $30 billion in cash and investments on hand to pay potential claims, but that it does not have enough to meet a legally required 2 percent capital ratio, which is a measure of its ability to withstand losses.

The FHA has not met its capital ratio since 2009, but the ratio only sank below zero this budget year.

“Although this one-time transfer of funds from the Treasury is legally necessary, it’s important to note that FHA is far from bankrupt,” said Representative Maxine Waters, a California Democratic who supports programs that help low-income borrowers.

Since the cash draw from Treasury will not be disbursed by the FHA, it will not impact how quickly the government runs out of money to pay its bills under the nation’s $16.7 trillion debt ceiling. In addition, the Treasury has the authority to take the $1.7 billion back once the FHA rebuilds its reserves.

After an independent audit in November found that its insurance fund could face losses as high as $16.3 billion, the FHA raised the amount it charges borrowers to insure mortgages against default and tightened underwriting. The changes, coupled with rising home prices, helped shrink the projected gap.

The FHA has said its cash needs were mainly driven by losses from reverse mortgages, which allow homeowners age 62 or older to withdraw equity and repay it only when their homes are sold. The agency, which is expected to spend $2.8 billion this year insuring reverse mortgages, backs 90 percent of such loans.

It has already announced new guidelines for potential reverse mortgage borrowers, including lower limits on the amount seniors can withdraw, higher mortgage insurance fees and tougher vetting of applicants. Those changes, however, do not go into effect until Tuesday.

Republicans have argued the FHA needs to take more aggressive action to protect taxpayers, including reducing maximum loan limits and raising minimum down payments.

The Obama administration contends some of those steps would undermine the agency’s mission to provide credit to first-time home buyers and needy communities.

The FHA has played a critical role supporting the housing market by insuring mortgages for borrowers who make down payments of as little as 3.5 percent. The FHA insures about $1.1 trillion in mortgages and now backs about one third of all new loans used to purchase homes, up from about 5 percent in 2006.


Fees to rise on some Mo. consumer loans

Monday, September 23, 2013

People in need of cash will face higher fees for some consumer loans under a law enacted by Missouri legislators when they overrode a veto by Gov. Jay Nixon.

The cost to consumers could be an additional $25 or $35 when they take out a loan, plus a similar charge each time they refinance or restructure it.

Yet there seems to be a difference of opinion about who precisely will be affected by the new law.

Nixon contends it could allow payday lenders to pocket more money. Yet the new law is not meant to target payday loans as they are defined under Missouri statutes. At issue are loans that are repaid in installments over multiple paydays — perhaps several months or years.

To some consumer advocates, there is little distinction.

“It’s high-cost debt that’s marketed as a bridge or financial fix but, in reality, this creates a debt trap that is very hard to get out of,” said Diane Standaert, senior legislative counsel for the Center for Responsible Lending, a Durham, N.C.-based nonprofit that opposes what it describes as “predatory lending practices.”

Missouri has 930 business locations licensed to offer payday loans and 943 offering consumer installment loans, according to an online database kept by the Missouri Department of Insurance, Financial Institutions and Professional Registration.

Many businesses are licensed to offer both.

So perhaps Nixon should be given some linguistic leeway when he expresses his frustration with the veto override.

“Raising fees on payday loans — it’s hard for me to see how that’s going to move our economy forward,” Nixon said in an interview last week.

Yet the new law is not meant to affect payday loans. Under existing Missouri law, a payday loan can be no larger than $500 and can run only from 14 to 31 days.

The new law applies to loans of 30 days or longer. It doubles the maximum loan origination from 5 percent to 10 percent of the principal but leaves in place an existing fee ceiling of $75. Those fees are in addition to whatever interest is charged.

The change in law applies both to “consumer installment lenders” and “small loan companies.”

Small loans must be for at least $500 and can include dealer-initiated debts for items such as dental work or vehicle sales that are serviced by financing companies. Consumer installment loans have no minimum dollar amount but must run for at least 120 days and include at least four equal payments.

Because the new law keeps in place the $75 fee ceiling, lenders can charge the full new 10 percent fee only on loans of up to $750, but can squeeze out a few extra dollars in fees on loans of up to $1,500.

Lobbyists were left scratching their heads when Nixon, in his written veto message, cited the $1,500 loan threshold while denouncing the measure for increasing “the fees that payday, title and consumer installment lenders can charge.”

“These are not payday loans. We have no interest in this bill,” said Randy Scherr, a lobbyist for the United Payday Lenders of Missouri.

Chris Liese, a lobbyist for the Missouri Finance Institute, which represents installment lenders, said he also had nothing to do with the legislation, though he acknowledged: “This section would help us.”

The lobbyist behind the fee increase was Harry Gallagher, who represents the Missouri Financial Services Association. Gallagher said his group of about 10 businesses includes some direct consumer lenders but is primarily composed of companies that buy consumer debt from retailers such as furniture stores. The loans are typically for $1,500 or more, he said.

“It has nothing to do with payday loans,” Gallagher said.

Originally, Gallagher wanted to raise the fee ceiling to $100 or perhaps even $150, which would have corresponded with a doubling of the fee percentage from 5 percent to 10 percent of principal. Under that scenario, a lender could have gotten a $150 fee off a $1,500 loan instead of current maximum of a $75 fee.

But Gallagher learned that the Missouri Bankers Association was pursuing a similar measure that raised its maximum fee to $75 for short-term cash advances.

He said he stuck with the $75 fee for his clients out of a concern than anything higher could invite a veto.

As it turns out, Nixon vetoed the legislation anyway.

The Republican-led Legislature overrode that veto Sept. 11 without much debate about the higher fees.

But Gallagher hardly counts it as a victory.

“This bill basically does nothing,” he said.

Gallagher added: “We were hoping to get a higher cap on it. When we couldn’t, I took what I could get. Maybe next year, or the year after or when Jay Nixon isn’t governor anymore we’ll be able to raise it to $100 or $150 to where it offsets the expense of putting a loan on the books.”

David A. Lieb has covered state government and politics for The Associated Press since 1995.

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Why Are Cash Advance Payday Loans Still Legal? | Short Term Loans

Image cashloans-92.jpg

Check cashing services – the hated underbelly of America’s personal finance system. Even Republican governments hate the ururious business so much that at one time, they tried more than once to shut it down. For instance, when the first President Bush was in power, he tried to bring in legislation that would make the distribution of all government benefits through government debit cards possible so that poor people would have immediate access to their money. But those good intentions were waylaid by technology. Today, the check cashing services have been replaced by businesses that deal in cash advance payday loans. In many cases, they live alongside of their new avatar.

How do these businesses take advantage of people, you ask? To begin with, they charge unconscionably high interest rates. And then as happened with swish marketing, they take money right out of your account without your knowledge. To get a payday loan, you have to fill out a form to give the lender authority to debit your account when you pay arrives. This is of course, a terrible idea, but there is nothing legally wrong with it. When you apply for your payday loan though, you are directed to a page where you have a few free offers and one paid offer. If you happen to miss the fact that one of the offers costs money, you’re out $55.

Exactly how high do the interest rates go on these cash advance payday loans, you ask? Many of them go up to 500%. If you are wondering how much that works out in real dollar terms, that would be something like paying $100 in interest a year on a $500 payday loan. Certainly, that’s not enough to send someone to the poor house. What they don’t tell you is, they count on you rolling your loan over to the next month and doing this repeatedly. They get most of their profits from people like this. This is enough to bleed anyone white.

Payday loans or so egregious for the interest rates they charge, many states like New York for instance, ban them altogether. When the Pentagon saw that there were so many serviceman who got ripped off every month by these people, they made it against the law for anyone to make cash advance payday loans to service personnel. But there is no federal law against doing this with civilians.

What do the big banks and other lending institutions think of these businesses that gave lending a bad name? Banks like Well Fargo are neck deep in the payday lending themselves; they’re the ones who bankroll the operations of the smalltime payday lenders. If only people could learn to manage their resources well enough that they didn’t need payday loans.


Pa. budget-related bill hung up over payday loans | …

HARRISBURG — A budget-related bill is hung up in the Pennsylvania Legislature after the Senate on Wednesday stripped out a provision inserted by the House that suggested that House and Senate Republican leaders support the legalization of high-interest “payday” loans in Pennsylvania.

As a result, the bill, which otherwise guides how hundreds of millions of dollars in public money is to be spent, headed back to the House. There Republican leaders will determine how time-sensitive the bill is before recalling rank-and-file members to Harrisburg to vote on it, a spokesman said.

Senate Majority Leader Dominic Pileggi, R-Delaware, told reporters that the statement on payday lending was not true and had not been agreed to by Senate Republicans.

“I think words are important … and that language was inaccurate and should not be in” the bill, Pileggi said.

The fiscal year began Monday, and the House and Senate both recessed until Sept. 23.

The 57-page bill emerged publicly Monday evening, just before the Republican-controlled House approved it over Democratic opposition.

The House GOP spokesman, Steve Miskin, said he could not explain why the payday lending provision was in the bill or who inserted it. The Philadelphia Inquirer reported that a lobbyist for one payday lending company organized a golf-outing fundraiser in February for House Speaker Sam Smith, R-Jefferson, in Pebble Beach, Calif.

Many consumer groups oppose payday lending, and Pennsylvania has some of the nation’s strongest laws against payday lending, despite repeated efforts by financial services companies to loosen state laws and do business here.

The bill also directs $45 million to Philadelphia schools as part of a rescue package for the district, and delay of passage holds up $235 million in aid to higher education institutions, Gov. Tom Corbett’s office said.

Corbett, who has promised voters on-time budgets, signed the general appropriations bill in a $28.4 billion budget package on Sunday night. But the general appropriations bill just is one piece in a legislative package that authorizes the state’s spending.

In a statement Wednesday, Corbett asked legislative leaders “to resolve their differences and act responsibly” to send the bill to his desk for approval as soon as possible. His budget secretary, Charles Zogby, said failure to promptly pass the bill “could have significant implications on commonwealth spending and revenues.”


Pa. budget-related bill hung up over payday loans – abc27 WHTM

News Minute: Here is the latest Pennsylvania news from The Associated Press

News Minute: Here is the latest Pennsylvania news from The Associated Press

Authorities say a 2-year-old central Pennsylvania boy critically injured in a July 4th fire has died, bringing the death toll from the blaze to seven, including six from one family. Crozer-Chester Medical Center spokesman…More >>

This Hour: Latest Pennsylvania sports

This Hour: Latest Pennsylvania sports

Jason Heyward hit a three-run homer to lead an Atlanta offense that scored in all but two innings, Tim Hudson pitched seven strong innings and the Braves set season highs for runs and hits in a 13-4 rout of the Philadelphia…More >>

This Hour: Latest Pennsylvania news, sports, business and entertainment

This Hour: Latest Pennsylvania news, sports, business and entertainment

Authorities say a 2-year-old central Pennsylvania boy critically injured in a July 4 fire has died, bringing the death toll from the blaze to seven, including six from one family.More >>

Home collapse in NE Philly prompts evacuations

Home collapse in NE Philly prompts evacuations

Fire department officials say a home has collapsed in northeast Philadelphia, prompting evacuation of several nearby residences.More >>Fire department officials say a home has collapsed in northeast Philadelphia, prompting evacuation of several nearby residences.More >>

Boy, 2, dies, bringing central Pa. fire toll to 7

Boy, 2, dies, bringing central Pa. fire toll to 7

Authorities say a 2-year-old boy critically injured in a central Pennsylvania house fire has died, bringing the toll from the blaze to seven.More >>Authorities say a 2-year-old boy critically injured in a central Pennsylvania house fire has died, bringing the toll from the blaze to seven.More >>

3 teens shot, wounded in north Philly

3 teens shot, wounded in north Philly

Police are searching for a gunman who fired shots at a group of teenagers, wounding three of them.More >>Police are searching for a gunman who fired shots at a group of teenagers, wounding three of them.More >>

Owner: Gettysburg map could soon be on view again

Owner: Gettysburg map could soon be on view again

A 12-ton light-up map of the decisive moments of the Battle of Gettysburg saved from the scrap heap by a central Pennsylvania businessman may soon be on display again.More >>A 12-ton light-up map of the decisive moments of the Battle of Gettysburg saved from the scrap heap by a central Pennsylvania businessman may soon be on display again.More >>

Authorities ID 2 Pa. men hurt in NJ plane crash

Authorities ID 2 Pa. men hurt in NJ plane crash

Authorities say two Pennsylvania men were in a small plane that crashed this week on a street near a northwestern New Jersey airport.More >>Authorities say two Pennsylvania men were in a small plane that crashed this week on a street near a northwestern New Jersey airport.More >>

Woman found stabbed to death in Philly-area city

Woman found stabbed to death in Philly-area city

Police in a Philadelphia-area city say a woman was found stabbed to death next to her apartment complex.More >>Police in a Philadelphia-area city say a woman was found stabbed to death next to her apartment complex.More >>

Pa. budget season ends with Corbett at crossroads

Pa. budget season ends with Corbett at crossroads

Republican Gov. Tom Corbett is starting to wade into a re-election campaign after the collapse of three major agenda items in the state Legislature.More >>Republican Gov. Tom Corbett is starting to wade into a re-election campaign after the collapse of three major agenda items in the state Legislature.More >>

HARRISBURG, Pa. (AP) – A spokesman says Pennsylvania House Republican leaders will decide when to bring rank & file members back to Harrisburg after senators stripped a provision from a budget-related bill that they say the House inserted without their approval.

The Senate voted unanimously Wednesday to send the bill back to the House after stripping out a provision that suggests House and Senate Republican leaders support the legalization of high-interest “payday” loans in Pennsylvania.

Senate Majority Leader Dominic Pileggi says the statement is simply inaccurate and doesn’t belong in legislation. Many consumer groups oppose payday lending.

House GOP spokesman Steve Miskin says he doesn’t know who inserted the provision. The Philadelphia Inquirer reports that a lobbyist for one payday lender organized a golf-outing fundraiser in February for House Speaker Sam Smith in Pebble Beach, Calif.

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