Wow, very impressive Jeff. Rather than reaching a compromise and allowing individuals to be SOMEWHAT responsible for their own actions, you drove many Oregon small businesses out of the state. Fantastic.

I agree there were predatory practices in some circumstances, but WHERE are these patrons now going for $$$????

Good for Merkley, there are so many of these slimy shops in district 47 preying on the poor. I'm glad he stood up for his constituents.

Posted by: torridjoe | Mar 28, 2008 12:08:39 PM

Torridjoe, you've completely thrown out your progressive cred by going to deep in the tank for Novick that you use Republican rhetoric to blast Merkley.

Just last year, you lauded Merkley's leadership for banning 500% interest rates, basically equating them with payday loan shops. The only thing those shops offer is predatory lending--there's no financial fairness to consumers in a payday loan store. You knew this back then.

But suppose Merkley should take credit for his accomplishments and point out its positive effects and results? Well, that's just a bridge too far for you.

Payday loan shops are not 'economic activity'--they're usury outlets, plain and simple. Why are these places going out of business? Because they can no longer charge someone 500% interest on a shitty loan. I'm sorry, but if you can't find another way to do business than screwing por people with their pants on, I don't have sympathy.

And we should feel compelled to help payday loan employees because we put them and their predatory practices out of business?

You're attacking Jeff Merkley from the right. And deep down, I think you know you're wrong.

Who's bright idea was it that the best way to convince Oregon voters to vote Merkley was to make his first order of business to help everyone else in the country and not Oregon?

We already passed payday loan reform in Oregon, right? So this bill doesn't help anyone in Oregon.

Now I am no expert political strategist, but it seems to me that it would be more important to Oregon voters to talk about things that effect Oregonians; the war, home mortgage meltdown, and health care for all.

I am voting for Merkley, but it kills me to see his campaign making decisions that at best have no value and at worst are counter-productive.

Posted by: torridjoe | Mar 28, 2008 12:32:17 PM Just last year, you lauded Merkley's leadership for banning 500% interest rates, basically equating them with payday loan shops. Link?

Loaded Orygun, Nov 29, 2007

You also demanded more payday loan legislation after the 06 special session in this comment at BlueOregon.

Two links.

[Off-topic ranting by someone who isn't Janet Reno deleted. -editor.]

Stephanie, that's just it: payday loan shops are now unlawful businesses in the state of Oregon.

Why? Because they can't survive without charging usurious rates. They can't even survive by charging the super-high interest rate of 36% that's still lawfully allowed.

If a business can't survive without doing something we the people all agree should be illegal, I think everyone should celebrate their departure from our state.

Certainly Jeff Merkley deserves credit for casting away this parasitic scourge on the working class. He's the one who took personal responsibility to pass these laws in 2006 and 2007.

TJ, I'm not an expert. Obviously, these shops are closing in response to legislation; that means they can't survive without doing something we jsut made illegal (and for good reason). Seems pretty obvious to me.

In that Loaded Orygun article I cited, you mention 'payday loans' or 'loans' five times. You use 'payday loans' interchangeably with 'predatory lending' throughout that article. So does your source site.

Why? Because 'payday loans' and 'predatory lending' are synonymous. Even predatory lending proponent Douglas P. Morgan recognizes them as synonymous, stating in his defense of payday loans that predatory lending is "a welfare reducing provision of credit." See Wikipedia's article for more examples of how predatory lending and payday loans are the same thing.

You're backtracking in order to cover your own ideological inconsistency on payday loans. And that's because you'll do or say anything to make Jeff Merkley look bad.

It's the only strategy you have for your preferred candidate, political consultant Steve Novick.

Stephanie, there's a difference between the de facto and de jure here.

Legally speaking, payday loan stores must obey the state's cap on usurious interest rates, which is now set at 36%. Those payday loan stores that charge only 36% APR are still allowed.

But the payday loan predatory lending model just doesn't work at 36%. Apparently, they can't make a profit if they're not completely screwing over poor people.

That's what I mean by de facto illegal. They can't comply with the law, or they simple refuse to and are closing instead.

It's utterly ridiculous for TJ to suggest sympathy for a company going out of business because they can't charge more than 36% APR. Insane.

By the way, Canada has a national APR limit at about 50%. Jeff Merkley would bring the United States' limits under that of our northern neighbor.

torridjoe said above: “The more serious approach is to show sympathy for the collateral damage, and seek to find a way in which short term loans can be offered fairly and still show a profit--because the market for them is not going away, and the state will end up having to deal with the natural consequences of the market being unmet anyway.”

Researchers at the Federal Reserve Bank of New York documented the “collateral damage” from two other states’ payday loan bans in a report published last November. They found that in Georgia and North Carolina, after these loans were banned in 2004 and 2005 respectively, “households…have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate.”

So, celebrate if you wish, but understand that effectively putting payday loans firms out of business in Oregon will likely hurt, not help, the very people you were trying to protect. Source: Payday Holiday: How Households Fare after Payday Credit Bans

I'm not wrong. What's the difference between payday loans and payday loan shops? You're really splitting hairs here, trying to obfuscate the mess of sophistry you've created through your Novick shilling. You're the one creating goalposts that don't really exist.

There's no difference between a shop that offers payday loans and that business's practice of lending.

Payday loan shops offer payday loans, and that's about it. Payday loan shops, payday loans, Check-Into-Cash, they're all predatory lenders!

And the number of payday loan shops is dwindling. There are only about 100 now, not 170, and that's down from 329 when the law took effect. I'd say the elimination of these shops is taking place pretty fast, though some may be staying open because they're a part of a national chain that can still screw people over in other states.

Hence the need for a national law!

And there you have it. A Right-wing think tank ideologue (Buckstein) just agreed with torridjoe's analysis.

"Payday loans can be fair, or they can be usurious."

Payday loans are inherently usurious, and so are the shops that make them.

But thanks for making the Republican case for payday loans once again. Just like your candidate, political consultant Steve Novick, is making the Republican case for Social Security's insolvency.

Interesting comparison came up above.

Novick Cred: Had the fun idea to toss out Payday candy bars at a Rebooting Democracy conference to illustrate the problems with predatory lending.

Merkley Cred: Successfully passed legislation to end predatory lending practices in Oregon, protecting vulnerable Oregonians all over the state.

Candy bars vs. financial security. You decide.

Way to dominate the comment board, torridjoe. Grown tired of conversations with the same 4 or 5 people over at Loaded Orygun? Getting many comments to your brilliant posts over there these days? Miss Carla much? Schmuck.

I'm happy to tip my glass of sparkling cider to Jeff Merkley for running this out-of-state corporate vulture out of our most blighted neighborhoods. There remain payday loan shops in Oregon presumably making a profit within the newly imposed legal limits, but merely turning a profit isn't enough for Check-into-Cash, which by their own decision to close their Oregon outlets shows that they are willing to settle for nothing less than obscene profits, and at the expense of those least able to bear the burden.

I'm not a baloons and hoopla kinda guy, but I have spent more than thirty years of my life working with the victims of a woefully inadequate social safety net, and politicians unable or unwilling to protect them from the corporate equivalent of loan sharks. Businesses may claim that the customers which are driven to them out of desparate circumstances are merely exercising free market choices are laughably transparent in their self-serving arguments. To hear otherwise progressive activists echo those rationales turns my stomach.

Of course regulating such industries as rent-to-own merchandisers and legalized loan sharks only treats a symptom of a much more serious disease of economic injustice and social inequality. But, while we work to address those larger issues, we cannot ignore the more immediate problems, especially as it translates into very real human suffering.

I have spent countless hours setting up revolving no-interest loan funds administered by small private charities, and fundraising to get them started and keep them afloat -- to assist individuals in crisis prevent eviction, obtain uncovered medical assistance, or deal with other necessities of survival. The crises are so intense that some of those individuals had to get extensions to repay loans made to them even at zero interest; some were never able to repay them at all, hence the need to continue to solicit donors. I don't see how any of them could have ever loosed themselves from the shackles imposed by 500% annual interest rates, nor can I perceive any benefit to the State of Oregon by allowing out of state corporations to peddle them here.

However enthusiastic one's support for his opponent, I am appalled by the notion that preventing Jeff Merkley from getting any credit for his work on legislation designed to protect this state's most vulnerable citizens, and his hope to do the same for people similarly situated throughout our country, could ever justify defending the profiteers who would prey on them in the name of "free market forces."

Now, for the tiresome recital of disclaimers. I am on the state coordination team for Progressive Democrats of Oregon, and serve as its point person for the Second Congressional District. The organization has not endorsed either candidate in the Senate race. I am also a volunteer for the Jeff Merkley campaign. My anti-poverty work has been as a priest in the Augustinian Missionary Order, which of course does not involve itself in partisan politics.

Good News

Both candidates played important roles in fighting predatory, payday lending in Oregon. As one of the state's leading ballot initiative experts, Steve was part of a team that supported the original payday loan reform initiative, which became the template for the successful Payday Loan Reform Act in the 2006 Special Session. Speaker Merkley then led the charge in the 2007 regular session to pass legislation that expanded the 36% limit to all consumer finance companies and ensured payday loan shops were not able to evade the limit in the 2006 legislation by changing their licenses.

Bad News

In the seeming never-ending struggle among a handful of commenters to turn every story about Jeff or Steve into a damning critique of the other candidate, TJ tries to pretend that equating "payday" lenders with "predatory" lenders is some new twist in this long-standing effort that has heretofore united the progressive community.

Please. Along with Steve's idea of passing out "Payday" bars in support of the original initiative at the 2006 Bus Conference, Our Oregon distributed a fact sheet in early 2006 with this bold heading:

"Payday loan outfits are predatory lenders"

http://www.ouroregon.org/cms/images/paydayloanballotwatch.pdf

That's been the consistent messaging from the time of Steve's involvement in 2005/2006 through the time of the Speaker's involvement in 2007/2008.

Pretending otherwise is about as plausible as Kevin's claim that he was giving Steve "props" for the OEA endorsement in this front-page post that proceeded to rip Novick in a stunning display of sour grapes:

http://www.blueoregon.com/2008/03/or-senate-race.html

Here's an idea: For all future stories of significance about Novick and Merkley, what say TJ, Kevin and their acolytes just exchange emails with each other rather than play out their tired spat on the pages of Blue Oregon?

Posted by: torridjoe | Mar 28, 2008 4:30:16 PM

Well, TJ, if there were 350 payday loan outlets before the law, and less then a year after there are only 100, that seems to tell me that most can't survive working at a 36% cap.

The vast majority of payday loan outlets (the ones that have closed) are therefore prohibitively usurious. And probably a lot more will close throughout the rest of the year.

But you go ahead and continue to argue this issue from the conservative perspective. NFIB might have talking points for you.

After reading the above posts, I have never felt worse about all of the time I have spent reading comments on this site (and Kos). I have wasted so much of my life.

I often agree with TorridJoe, but not this time. The smart thing to do in an instance such as this, Mr. Joe, is to ignore your opponent. Trashing Jeff Merkley because he did something the overwhelming majority of Oregonians -- and Steve Novick -- clamored for, burns through your cred in record time.

I support Steve, and I thank the Speaker for shutting down payday loan shops.

Roy was working at minimum wage as a security guard when I first met him, and was obviously humiliated at having to register with our food pantry to feed his pregnant wife and their two young children. He had already sold or pawned many of the family's belongings accumulated during his short career as a janitor at a shoe factory before it closed as an early casualty of outsourcing, and remembered well the dignity, security and freedom of a union job with benefits. He had sold one of their two cars for little more than what was still owing on the auto loan, but at least it got him out from under one set of monthly payments.

I saw him and his wife from time to time over the next several months, occasionally providing some modest assistance, but usually taking pains to avoid violating his clear desire to get in and out of our neighborhood ministry center as close to unnoticed as possible.

Then one day he showed up at my office door in a very uncharacteristic agitated state. It was winter, and the heat to the family's apartment had been cut off and eviction proceedings were pending. It turned out that after a difficult delivery, their infant daughter had died from an ambiguous "failure to thrive." The hospital had pressured them to make payments they could not afford under threat of withdrawing access to their affiliated health clinic. They had resorted to a payday loan to cover a bare bones funeral and burial package, and the requirement to secure it with an increasingly large post-dated check each time they, by necessity, rolled it over prevented their being able to pay rent and utility bills. This desperate and bereaved family was facing the probability of homelessness, and they were justifiably terrified.

This is but one of hundreds of stories I could relate, except that for me they are not just stories. Of course, closure of the payday loan company would not have provided this family necessary prenatal care, affordable housing, or prevented closure of the factory which had provided them a modest but solidly middle class lifestyle. Its exploitation of this vulnerable young family was the last in a succession of tragedies, all of which could have been prevented by reasonable progressive public policy. It was one, however, which so locked them into their downward spiral that it made their situation nearly impossible to reverse, even with extraordinary intervention.

For me, the human suffering of even just one of these American families drowns out the talking points for fleeting political advantage I read in this comment thread.

It is righteous that these predators are being run out of Oregon. Good work, but let's not stop there. There are lots of ways an individual who has difficulty making it from paycheck to paycheck is being stripped of their "wealth".

Now let's do the right thing and also change laws so that those same folks, who you must admit are most likely have a low credit score (but not necessarily a poor driving record), can no longer be charged higher auto (and all other) insurance rates because of their low credit score.

At least the victims of payday loan companies had a choice to walk through the door and sign the contract...auto insurance is mandatory. And people struggling to meet the rising cost of living with stagnant wages are being scalped by higher premiums than more solvent drivers with a good driving records pay.

With so many Oregonians who never thought they could get behind the eight ball and who now see their credit score sinking and insurance premiums rising....I just have to wonder if we brought back a Measure 42, would it pass now?

I'm going to rain on this self-congratulation emotion fest. Some cold facts from the NY Fed, delivered by an arch-Liberal.

As George McGovern wrote in the 07-Mar-2008 Wall Street Journal, (http://online.wsj.com/article/SB120485275086518279-search.html?KEYWORDS=payday&COLLECTION=wsjie/6month) bans and restrictions on payday lenders (exclusive of laws about abusive practices) lead to worse results for poor people:

"Researchers from the Federal Reserve Bank of New York went one step further and laid the data out: payday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy. Net result: after a lending ban, the consumer has about the same amount of debt but fewer ways to manage it."

McGovern goes on to say:

"Since leaving office I've written about public policy from a new perspective: outside looking in. I've come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.

"Why do we think we are helping adult consumers by taking away their options? We don't take away cars because we don't like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don't operate mindlessly in trying to smooth out every theoretical wrinkle in life.

"The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else."

I really think most of the people pushing legislation to protect paycheck to paycheck workers still do not have a clue to the real problem....a dearth of livable wage jobs, and the thought process that a person who grinds his bones at physical on-your-feet labor for 40 years or more is less worthy of renumeration than a person who sits behind a desk.

I've got to hand it to Jeff Merkley for doing a fine job leading our state legislature in my opinion. I can never seem to get a reply from my state congresswoman on any issue which results in me contacting his office which always provides the assistance my congresswoman never seems to have time to provide.

Congratulations to Jeff Merkley for leading this effort to drive such businesses out.