Title pawn lenders pull out wallets
Politicians who get cash say they can't be bought
By ALAN JUDD, ANN HARDIE
Published on: 02/12/06
When proposed legislation threatened their high-profit industry, Georgia title pawn lenders responded by giving key state politicians the same thing they offer consumers: quick cash.
And now the threat appears to have passed.
A year ago, Georgia lawmakers were pondering a reduction in the industry's triple-digit interest rates. Now, they're considering legislation that falls far short of title pawn restrictions sought by consumer advocates.
During the past year, the title pawn industry gave $328,310 to 75 Georgia politicians and three political committees, according to an analysis of campaign finance reports by The Atlanta Journal-Constitution.
The industry donated just $133,400, less than half that amount, during the two previous years combined, the newspaper found.
Among the top recipients: the House speaker, the Senate's presiding officer, and the chairmen of committees deciding the fate of bills that could have crippled the title pawn industry.
The spike in giving follows a pattern forged by other industries trying to win the debate over legislation affecting them.
Trial lawyers and doctors poured money into campaigns as lawmakers considered limits on civil litigation awards. Competing interest groups trying to gain an advantage ? optometrists and ophthalmologists, dental assistants and dentists, midwives and obstetricians ? often try to outspend each other when their disputes land before lawmakers.
It is rare, however, for all the donors to represent so similar a point of view. Likewise, it is rare for any group's political activity to escalate so dramatically as the title pawn industry's did during the past year.
300 percent interest
The industry had maintained a modest profile since 1992, when Georgia became the first state to authorize motor vehicle title pawns. The 1992 law allows the loans, marketed to people with bad credit or low incomes, to charge annual interest rates as high as 300 percent. Georgia does not allow interest rates higher than 60 percent for any other type of regulated credit.
The wave of title pawn money has had an obvious impact, said state Rep. Mary Margaret Oliver (D-Decatur). She sponsored a bill that would have significantly lowered the maximum interest rate on title pawns. Lenders said a lower cap on the interest rate would put them out of business, and more industry-friendly measures quickly displaced Oliver's bill.
"The title pawn industry is enormously profitable and sophisticated," Oliver said. "They have ramped up their political activity in all ways to mitigate reform efforts in the Georgia General Assembly."
Other lawmakers say the industry's money has not purchased influence.
"Making contributions and accepting contributions don't necessarily affect the outcome," said Senate President Pro Tem Eric Johnson (R-Savannah), who received $10,448 from title lenders last year. "It shouldn't affect how you vote."
A necessary expense
The industry defends its political spending as a necessary tool for self-protection.
"There's nothing sinister," said Phil Kent, a spokesman for the United Title Pawn Council of Georgia, a lobbying group. "This is how the process works."
He added: "We don't want the industry gutted. We live or die by the Legislature."
Industry executives, Kent said, felt threatened after a series of articles in the Journal-Constitution last year examined title pawns and other kinds of lending that target poor, unsophisticated consumers.
The series, "Borrower Beware," reported that among the 25 states where title lending is legal, Georgia is one of two that do not regulate the industry. And, unlike other states, Georgia allows title lenders who repossess their customers' cars to sell the vehicles and keep all the proceeds. Lenders sometimes reap thousands of dollars of profits through repossessions.
In response to the series, Oliver and state Sen. Steen Miles (D-Decatur) filed bills that would have slashed the maximum interest rate. The industry, in turn, began spreading contributions to politicians who might play a role in handling those bills.
Title lenders donated to 11 of the 13 members of the Senate's Banking Committee. In the House, the lenders gave to 16 of the banking panel's 33 members. One of them was Rep. James Mills, the committee chairman.
'I give fair treatment'
Mills (R-Gainesville) accepted campaign contributions totaling $10,000 when he spoke at a title pawn industry meeting last June. By year's end, records show, he had collected $17,100 from the industry.
Now he is sponsoring the only House bill on title pawn that is likely to get a hearing this year. The measure, HB 864, calls for title lenders to return any money left over after they repossess and sell a borrower's car. The bill, which could reach the House floor this week, also requires borrowers to make minimum payments toward the principal of their loans, in addition to interest payments, after three months.
The bill, however, does not address interest rates. Nor does it call for state regulation of title lending. Consequently, consumer advocates say Mills' bill offers few meaningful protections.
Mills bristled last week when asked about his contributions from the industry.
"The reason you know about any contributions I have is because I report them," Mills told a reporter. "I don't give preferential treatment. I give fair treatment."
Senate Banking Committee Chairman Bill Hamrick last week introduced a title pawn bill similar to Mills'. Hamrick's measure (SB 535), though, would also require title pawn lenders to register with the Governor's Office of Consumer Affairs and to notify borrowers before repossessing their vehicles.
Hamrick (R-Carrollton) filed the bill after receiving $14,500 from the industry last year. He said the campaign contributions did not keep him from seeking tighter restrictions.
"We learned in the hearings that there was a need for this kind of business," Hamrick said.
Sen. Bill Stephens (R-Canton), a former Senate majority leader, received $25,483 for his campaign for secretary of state. Some title pawn executives have suggested assigning the secretary of state's office to oversee their industry.
Stephens said he doesn't like that idea. The industry's money, he said, won't change his mind.
"If you can't take their money and vote against them," Stephens said, "you ought not to be in politics."
Deep pockets
Donors affiliated with two large title pawn companies made most of the contributions: Alpharetta-based Select Management Resources, which operates as Atlanta Title Loan in the metro area, and Savannah-based TitleMax.
In 2003 and 2004, TitleMax and its top executives donated $13,200 in Georgia elections. Last year, they gave $74,406.
The increase was even greater for Select Management. Donations from the company, its affiliates and officers went from $61,000 in 2003 and 2004 to $192,954 last year.
"I always am a supporter of good government," Select Management's chief executive, Rod Aycox, said of the donations. "Nothing more, nothing less than that."
Along with cash, contributions by both companies included lawmakers' use of their corporate airplanes, usually to raise money from other supporters.
Aycox said he twice let Senate leaders use one of his planes to visit Georgia cities. He also flew Rep. Earl Ehrhart (R-Powder Springs) to a legislative conference in Dallas and House Speaker Glenn Richardson (R-Hiram) to a conference in Las Vegas.
Efforts last week to reach Ehrhart about the flights were unsuccessful. Ehrhart accepted $15,652 from title lenders last year, campaign records show.
'You get face time'
A spokeswoman for Richardson, Michelle Hitt, acknowledged that a lobbyist for Aycox's company was on the plane to Las Vegas. But, she said, "As best as can be remembered ? after all, this was many months ago ? topics of discussion ranged from football to the conference they were attending."
"There is no quid pro quo" for the $18,354 he received from the industry last year, Hitt said.
Flights on Select Management's aircraft were valued at $6,947, according to campaign finance records. TitleMax provided $1,813 in flights.
For as long as a flight lasts, the title lenders have a captive audience.
"You get face time," said Kent, the industry spokesman. "You're trying to get face time with the leaders you view as important."
Such largess overwhelms the efforts of consumer advocates. They want lawmakers to lower the interest rate on title pawns, but have little to offer as an incentive.
"We have to fight with our minds and our hearts," said Danny Orrock, legislative coordinator for the advocacy group Georgia Watch. "We don't have campaign contributions at our disposal."
.................................................................
Is it plainly obvious how this works ? It amounts to bribery and when is it going to stop. And its all legal. Politicians decide to help the poor people not get ripped off so much. Or what is their real agenda ? Next thing you know they have 17 grand in their pockets for their continued election.
Next thing you know bills that were coming up are no long relevant.
Hard to believe Americans are so stupid to continue to allow it.
Politicians who get cash say they can't be bought
By ALAN JUDD, ANN HARDIE
Published on: 02/12/06
When proposed legislation threatened their high-profit industry, Georgia title pawn lenders responded by giving key state politicians the same thing they offer consumers: quick cash.
And now the threat appears to have passed.
A year ago, Georgia lawmakers were pondering a reduction in the industry's triple-digit interest rates. Now, they're considering legislation that falls far short of title pawn restrictions sought by consumer advocates.
During the past year, the title pawn industry gave $328,310 to 75 Georgia politicians and three political committees, according to an analysis of campaign finance reports by The Atlanta Journal-Constitution.
The industry donated just $133,400, less than half that amount, during the two previous years combined, the newspaper found.
Among the top recipients: the House speaker, the Senate's presiding officer, and the chairmen of committees deciding the fate of bills that could have crippled the title pawn industry.
The spike in giving follows a pattern forged by other industries trying to win the debate over legislation affecting them.
Trial lawyers and doctors poured money into campaigns as lawmakers considered limits on civil litigation awards. Competing interest groups trying to gain an advantage ? optometrists and ophthalmologists, dental assistants and dentists, midwives and obstetricians ? often try to outspend each other when their disputes land before lawmakers.
It is rare, however, for all the donors to represent so similar a point of view. Likewise, it is rare for any group's political activity to escalate so dramatically as the title pawn industry's did during the past year.
300 percent interest
The industry had maintained a modest profile since 1992, when Georgia became the first state to authorize motor vehicle title pawns. The 1992 law allows the loans, marketed to people with bad credit or low incomes, to charge annual interest rates as high as 300 percent. Georgia does not allow interest rates higher than 60 percent for any other type of regulated credit.
The wave of title pawn money has had an obvious impact, said state Rep. Mary Margaret Oliver (D-Decatur). She sponsored a bill that would have significantly lowered the maximum interest rate on title pawns. Lenders said a lower cap on the interest rate would put them out of business, and more industry-friendly measures quickly displaced Oliver's bill.
"The title pawn industry is enormously profitable and sophisticated," Oliver said. "They have ramped up their political activity in all ways to mitigate reform efforts in the Georgia General Assembly."
Other lawmakers say the industry's money has not purchased influence.
"Making contributions and accepting contributions don't necessarily affect the outcome," said Senate President Pro Tem Eric Johnson (R-Savannah), who received $10,448 from title lenders last year. "It shouldn't affect how you vote."
A necessary expense
The industry defends its political spending as a necessary tool for self-protection.
"There's nothing sinister," said Phil Kent, a spokesman for the United Title Pawn Council of Georgia, a lobbying group. "This is how the process works."
He added: "We don't want the industry gutted. We live or die by the Legislature."
Industry executives, Kent said, felt threatened after a series of articles in the Journal-Constitution last year examined title pawns and other kinds of lending that target poor, unsophisticated consumers.
The series, "Borrower Beware," reported that among the 25 states where title lending is legal, Georgia is one of two that do not regulate the industry. And, unlike other states, Georgia allows title lenders who repossess their customers' cars to sell the vehicles and keep all the proceeds. Lenders sometimes reap thousands of dollars of profits through repossessions.
In response to the series, Oliver and state Sen. Steen Miles (D-Decatur) filed bills that would have slashed the maximum interest rate. The industry, in turn, began spreading contributions to politicians who might play a role in handling those bills.
Title lenders donated to 11 of the 13 members of the Senate's Banking Committee. In the House, the lenders gave to 16 of the banking panel's 33 members. One of them was Rep. James Mills, the committee chairman.
'I give fair treatment'
Mills (R-Gainesville) accepted campaign contributions totaling $10,000 when he spoke at a title pawn industry meeting last June. By year's end, records show, he had collected $17,100 from the industry.
Now he is sponsoring the only House bill on title pawn that is likely to get a hearing this year. The measure, HB 864, calls for title lenders to return any money left over after they repossess and sell a borrower's car. The bill, which could reach the House floor this week, also requires borrowers to make minimum payments toward the principal of their loans, in addition to interest payments, after three months.
The bill, however, does not address interest rates. Nor does it call for state regulation of title lending. Consequently, consumer advocates say Mills' bill offers few meaningful protections.
Mills bristled last week when asked about his contributions from the industry.
"The reason you know about any contributions I have is because I report them," Mills told a reporter. "I don't give preferential treatment. I give fair treatment."
Senate Banking Committee Chairman Bill Hamrick last week introduced a title pawn bill similar to Mills'. Hamrick's measure (SB 535), though, would also require title pawn lenders to register with the Governor's Office of Consumer Affairs and to notify borrowers before repossessing their vehicles.
Hamrick (R-Carrollton) filed the bill after receiving $14,500 from the industry last year. He said the campaign contributions did not keep him from seeking tighter restrictions.
"We learned in the hearings that there was a need for this kind of business," Hamrick said.
Sen. Bill Stephens (R-Canton), a former Senate majority leader, received $25,483 for his campaign for secretary of state. Some title pawn executives have suggested assigning the secretary of state's office to oversee their industry.
Stephens said he doesn't like that idea. The industry's money, he said, won't change his mind.
"If you can't take their money and vote against them," Stephens said, "you ought not to be in politics."
Deep pockets
Donors affiliated with two large title pawn companies made most of the contributions: Alpharetta-based Select Management Resources, which operates as Atlanta Title Loan in the metro area, and Savannah-based TitleMax.
In 2003 and 2004, TitleMax and its top executives donated $13,200 in Georgia elections. Last year, they gave $74,406.
The increase was even greater for Select Management. Donations from the company, its affiliates and officers went from $61,000 in 2003 and 2004 to $192,954 last year.
"I always am a supporter of good government," Select Management's chief executive, Rod Aycox, said of the donations. "Nothing more, nothing less than that."
Along with cash, contributions by both companies included lawmakers' use of their corporate airplanes, usually to raise money from other supporters.
Aycox said he twice let Senate leaders use one of his planes to visit Georgia cities. He also flew Rep. Earl Ehrhart (R-Powder Springs) to a legislative conference in Dallas and House Speaker Glenn Richardson (R-Hiram) to a conference in Las Vegas.
Efforts last week to reach Ehrhart about the flights were unsuccessful. Ehrhart accepted $15,652 from title lenders last year, campaign records show.
'You get face time'
A spokeswoman for Richardson, Michelle Hitt, acknowledged that a lobbyist for Aycox's company was on the plane to Las Vegas. But, she said, "As best as can be remembered ? after all, this was many months ago ? topics of discussion ranged from football to the conference they were attending."
"There is no quid pro quo" for the $18,354 he received from the industry last year, Hitt said.
Flights on Select Management's aircraft were valued at $6,947, according to campaign finance records. TitleMax provided $1,813 in flights.
For as long as a flight lasts, the title lenders have a captive audience.
"You get face time," said Kent, the industry spokesman. "You're trying to get face time with the leaders you view as important."
Such largess overwhelms the efforts of consumer advocates. They want lawmakers to lower the interest rate on title pawns, but have little to offer as an incentive.
"We have to fight with our minds and our hearts," said Danny Orrock, legislative coordinator for the advocacy group Georgia Watch. "We don't have campaign contributions at our disposal."
.................................................................
Is it plainly obvious how this works ? It amounts to bribery and when is it going to stop. And its all legal. Politicians decide to help the poor people not get ripped off so much. Or what is their real agenda ? Next thing you know they have 17 grand in their pockets for their continued election.
Next thing you know bills that were coming up are no long relevant.
Hard to believe Americans are so stupid to continue to allow it.
