Hitting People When They Are Down: The Loan Sharks Are On Their Way Back To Pennsylvania

It has been a bad year or two for vulnerable Pennsylvanians. From school funding cuts, to the apparent elimination of very basic, humane general assistance, to slashes to higher education and the refusal to properly fund public transit, piece after piece of our state's basic social compact is methodically being cut away. The “Commonwealth of Pennsylvania” has rarely sounded like a more misplaced name.

And yet, to make matters worse, in a morbid move that feels like a gilded-age pincer attack, Pennsylvania may take it one step further. Because right as the same time as Pennsylvania is producing ever more struggling people, the state is poised to invite in the private industries that profit by... ripping off struggling people. First up on the list, fresh off of passage in the State House, are everyone's favorite loan sharks: payday lenders.

And, for those us in the City of Brotherly Love, if that wasn't bad enough, a number of Philly's own legislators appear poised to be help make it happen.

The backstory is that, despite being illegal, payday lenders once operated widely in Pennsylvania. But, through private lawsuits, through the closing of loopholes and through other government action, payday lenders and their illegally high interest rates were booted out of the state. What was long illegal stayed illegal. The good guys won. The storefronts closed. Less vulnerable people were hurt.

Let there be no question: Payday lending is a horrible thing. It is nothing more than credit heroin, with loans made at annual interest rates of over 300%. It is pitched to desperate people, with the express desire to get them hooked, so that every two weeks they have to return to the well, being forced to take out a new loan just to fill the budget gap caused by the first one.

So how, in this very moment of economic calamity, austerity and publicly-inflicted misery, did payday lenders set themselves up for this return? I will give you one guess:

One fast-tracked proposal would bring back the controversial practice of payday lending to stores in neighborhoods, strip malls, even hospitals.

The measure passed the House on a 102-90 vote Wednesday, after a veritable army of lobbyists for the short-term loan industry worked Capitol offices.

Among the firms represented: Cash America, one of the nation's largest payday lenders, which in this legislative session has reported spending $125,000 on lobbying in Harrisburg.

All those who selected “because they paid for it,” please collect your prizes on the way out.

As are so many horrible bills that target consumers, this one also has the Orwellian gift of being pitched as a consumer protection bill. Of course, if your bill is supposed to protect vulnerable consumers and it is opposed by, among other groups, the AARP, Community Legal Services, United Way, Pennsylvania's National Association of Consumer Advocates, the Pennsylvania AFL-CIO, The Reinvestment Fund, Regional Housing Legal Services, the Navy-Marine Corps Relief Society and on and on, you might have a clue that, in fact, the bill is not protecting consumers.

Instead, in order to give cover for this so-called consumer protection, and so that the bill's sponsors can pretend to blur reality, the industry funded and founded a group, named the  “Consumer Rights Coalition.” This group, however, is actually “a payday lobby group that’s donned a name intended to create the illusion that this product has grassroots consumer support when it doesn’t.” Of course it is. It was founded by the executive leadership of Cash America, the internet payday lender, and leading beneficiary of the bill. That's pretty close to the extent of who supports this: rich loan sharks, their front group, and the politicians who enable them.  

Which brings us to where we are now. The bill just barely passed the House of Representatives, with a number of Republicans crossing over to vote against it.  Sadly, helping pass this in the House were, among other people, three State Reps from Philly: Keller, Sabatina and Taylor. (Fighting the good fight, and helping lead a charge that almost defeated the bill was State Rep. Cherelle Parker.)

Now, the bill is before the Senate and it is time for our Philly-based State Senators to state clearly that they oppose legalizing loan sharking and stand with their constituents, not the army of payday lenders and their lobbyists that are currently encircling Harrisburg. Our Philly-based Senators are:

Anthony Williams
Leanna Washington
Christina Tartaglione
Mike Stack
Shirley Kitchen
Larry Farnese
Vince Hughes

Each of these Senators represents many, many constituents that would be directly hurt by this bill. Most of them will likely do the right thing. But, it is really odd that a single one would even consider supporting it. I mean, if you were, for example, planning to run for Mayor, would you really be thinking about legalizing a business that openly targets poor people, while every single consumer advocacy group tells you not to? And yet, the rumblings are that someone like Senator Williams is wavering, at best.

Luckily, nothing is yet set in stone and there is still time for every single one of our Senators to do the right thing, join the fight, and stop this thing. Contact them, let them know where you stand, and ask them to do the same. And, if you hear back from them, let us all know.

Now, right as we slash social services, forcing people to become ever more vulnerable and desperate, is not the time to invite 21st century loan sharks back into Pennsylvania.

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