Missouri has one of the nations laxest set of regulations governing payday lending. It also has one of the nations weakest ethics laws. That combination goes a long way toward explaining the abundance of storefront payday loan shops in the state, as well as the fast inroads seen from the online payday loan business.
By Barb Shelly
The legislatures refusal to cap campaign contributions has encouraged the payday loan industry to give generously to helpful lawmakers. Another ethical failing enables legislators to move directly from lawmaking to lobbying. Thats exactly what Republican House Speaker Steve Tilley did last year. In fact, he resigned his legislative post a few months early so he could get to the lobbying trough more quickly.
You probably can see where this is going. Documents filed with the Missouri Ethics Commission show that Tilley recently became a lobbyist for the Online Lenders Alliance.
If storefront payday lending is out of control in Missouri, the prospects for abuse in online lending are even higher. The Online Lenders Alliance says its mission is to encourage best practices and a code of conduct. And to encourage the federal and state government to make it as easy as possible for these business to operate and turn a hefty profit at the expense of people in bad financial straits, I would add.
From the Online Lenders Alliance website:
Despite the thousands of positive stories relayed to short-term lenders by subprime customers, there remain a large number of misconceptions and myths surrounding the online lending industry. One of our tasks as a professional organization is to dispel these myths, clear up the misconceptions, and educate the public, legislators and regulators about the demand and need for consumer short-term loans on the Internet.
I would argue that there is no need whatsoever for consumer short-term loans on the Internet, only trouble. And I predict with confidence that, thanks to unlimited campaign contributions and the easy step from legislature to lobbyist, this fast-growing industry will find Missouri to be fertile terrain for its work.