Paydaylenders prey on the working poor by providing extremely high-interestloans (for example, a 10-week loan for $200 could cost an additional$200 in interest and fees). This issue was so serious that DonaldRumsfeld, former secretary of defense for President Bush, found thathaving payday lenders near military bases was a threat to members ofthe military. Rumsfeld supported legislation very similar to theWisconsin bill authored by Rep. Gordon Hintz that limits interest to36% a year.
Rep.Hintz’s Assembly Bill 392 to regulate payday lenders has been referredto the Committee on Financial Institutions, where it is almost certainto die. Why is AB 392, which is about as clear an example of goodpublic policy as the Legislature has dealt with in the past severalyearsand which has strong bipartisan support, ranging from progressiveMilwaukee legislators like Rep. Jon Richards and Sen. Lena Taylor tovery conservative Republicans like Sen. Glenn Grothman of West Bend andSen. Alan Lasee of De Perenot going to pass? The answer is simply thatpayday-lending stores are very, very profitable and the companies thatown them, many from out of state, have paid big money to hire 27lobbyists to fight this bill.
Sohere is how it works. When a bill is clearly for special interests, asthis one is, it is too difficult for the lobbyists to simply ask amajority of the legislators to vote to screw over their poor andmiddle-income constituents in favor of preserving the profits ofwealthy loan sharks. Instead, the payday lenders have one of their“industry friendly” legislators introduce a watered-down, ineffective,industry-written bill to compete with the real legislation. This billis AB 311. Then industry puts forth bogus arguments, including claimsthat the passage of the real bill would put lenders out of business andthat people in need of quick cash would be out of luck.
Thefact that payday lenders are making money in at least 14 other statesthat have laws that are as strong as the Wisconsin bill does not stopthem from promulgating their lies. After they create their phony bill,AB 311, and their lies about the real bill, AB 392, they convince theleadership of the Legislature to refer both bills to a committeeinthis case, the chair of that committee, a Milwaukee legislator, haspublicly stated that he does not see any problems with the payday loansituation. This support for the payday loan industry comes on the heelsof a report by the nonpartisan Wisconsin Legislative Reference Bureauwhich stated that the annual interest rate on these payday loans is542%. So for each $100 borrowed, a person pays more than $500 ininterest in a year.
Butthe committee chair will hold hearings on the bills and, low andbehold, in all likelihood the phony bill AB 311 will be voted out ofcommittee and the real bill AB 392 will die in committee. Then when AB311 eventually passes, these “industry friendly” legislators will bragabout how they helped the average Wisconsin resident while all of theabuses continue.
Heroes of the Week: Tomas Kelnhofer, Liliana Kelnhofer and Roselia Hernandez
Amongthe honorees at the 2009 Milwaukee Riverkeeper Bash was TomasKelnhofer, a teacher at Hayes Bilingual Elementary School. Kelnhofer,his wife, Liliana, and Roselia Hernandez were recognized for theirefforts to preserve our local waterways. The trio was lauded forintegrating environmental stewardship into a fifth-grade curriculumthat is “centered on raising awareness of the Kinnickinnic River andengaging students, teachers, families and local residents in efforts toimprove this important asset to their community.” They have mobilizedthe community in multiple environmental efforts, including rivercleanups and assisting in the planting of the Cleveland Park raingarden. The Shepherd acknowledges the initiative and efforts ofordinary citizens like the Kelnhofers and Hernandez who take the timeto make Milwaukee a healthier, greener community for everybody.
Jerk of the Week:Wisconsin Manufacturers & Commerce
WisconsinManufacturers & Commerce (WMC) touted the results of its recent“poll” as evidence that Wisconsinites are largely opposed to proposalsaiming to curb harmful greenhouse gas emissions in the state. Proposalsby Gov. Jim Doyle’s Global Warming Task Force, which have yet to evenbe debated, promote the expansion of existing clean energy sources,such as wind farms, and further investment in green technologies. Thatcan’t be comforting to WMC, which represents some of the biggest energyproducers (and polluters) in the region. So WMC’s poll questions werephrased to achieve its desired result, using language essentiallyasking: “Would you support renewable energy mandates if it meant youwould lose your job?” Perhaps WMC could lower its membership dues if itdidn’t waste money on phony polls.
