Monday, July 18, 2005

Will campaign contributions from predatory lenders affect their decision to regulate the industry?

"Goodness, no!"

Georgia's automobile title lenders didn't wait for a public hearing Thursday to talk to lawmakers considering proposals to regulate their industry.

Instead, they played host to the chairman of the House Banking Committee - the panel considering the proposals - at the industry's annual convention on June 13. And after state Rep. James Mills spoke, the lenders put on a reception at which they provided the Gainesville Republican with campaign contributions totaling $10,000.

The donations were part of $120,000 that title lenders have poured into Georgia political campaigns this year as legislators ponder major changes in an industry that is allowed to make loans with annual interest rates as high as 300 percent. . . .

Besides Mills, the lenders' favorites during the first half of 2005 included Sen. Bill Hamrick (R-Carrollton), the Senate banking committee chairman, who received $7,500 from title pawn operators. Hamrick's committee will conduct hearings on title lending this summer.

The lenders also gave heavily to Republican Gov. Sonny Perdue, Lt. Gov. Mark Taylor, who is the state Senate's presiding officer and a Democratic candidate for governor in 2006, and former Senate Majority Leader Bill Stephens (R-Canton), who is running for secretary of state.

Mills and Hamrick said the donations from the title loan industry would not influence their committees.

"Goodness, no," Mills said during a break in Thursday's hearing.

I believe him, don't you?

The article outlines the bills under consideration: one would limit the annual interest rate on a loan to 60%, and the other would require that if a lender repossessed and sold a borrower's car to pay a loan, the lender would have to refund the borrower any money beyond that required to cover the loan.

It says a lot about the industry that they're opposed to even these minimal regulations, and it says something about the politicians who took their money, too. Where do these politicians think that money came from? It came from the woman who testified before them, who told them, even as she lauded the predatory lenders, that she paid $600 on a $250 loan.

I wonder which of those folks - James Mills, Bill Hamrick, Sonny Perdue, Mark Taylor, Bills Stephens - ultimately got her $350?