Top Democratic and Republican elected officials in Missouri banked more than $1.6 million in campaign contributions from payday lenders and their lobbyists over the past decade, according to a report by national campaign finance watchdog Public Campaign.
More than half of the money was given during the 2010 election cycle alone. The total does not include the more than $2.3 million spent by a Kansas City nonprofit group in the last year to fight a ballot measure opposed by the payday lending industry.
The top recipient from the industry and its lobbyists has been House Speaker Steve Tilley, a Perryville Republican who will leave elected office at the end of the year. From 2000 to 2011, Tilley received more than $70,000 in donations, Public Campaign found.
Other top recipients who currently hold public office include Republican Rep. Tim Jones, who is expected to become House speaker next year, and Democrats such as Gov. Jay Nixon, Senate Minority Leader Victor Callahan of Independence and House Minority Leader Mike Talboy of Kansas City.
Public Campaign, a critic of the payday lending industry, contends that the donations helped stifle changes to the state’s payday lending regulations. The average interest rate for a payday loan in Missouri is 445 percent annually, and legislation aimed at capping that rate has repeatedly failed to get traction.
Supporters of tougher regulation on short-term loans launched a petition drive hoping to put a 36 percent interest rate cap on the ballot this fall. A lawsuit challenging the measure is currently before the Missouri Supreme Court, which could rule as early as Tuesday.
QC Holdings Inc., a payday lender based in Overland Park that operates primarily under the Quik Cash name, is the largest of the industry’s Missouri donors. The company has spent around $340,000 between the 2000 and 2010 election cycles, Public Campaign found.
The company has also been active in fighting the payday lending ballot measure. One of its executives is the lead plaintiff in the lawsuit, and the company told the U.S. Securities and Exchange Commission earlier this year that it had already spent a substantial amount opposing the measure.
Much of that money probably went to the nonprofit Missourians for Responsible Government, which over the last year donated $2.3 million to a political committee formed to fight the measure. That included a $210,000 donation on Thursday. As a nonprofit group, Missourians for Responsible Government is not required to disclose its donors.
A payday loan, in general, involves a borrower writing a personal check to the lender, who then holds the check 14 to 31 days. At the end of that period, the check is deposited, the borrower returns with cash to reclaim the check or the loan gets renewed and the borrower pays additional fees. Payday loan amounts typically range from $100 to $500.
Missouri has one of the highest densities of payday lending stores in the country, with more than five shops for every 10,000 households.
Critics of payday lenders contend they profit by targeting low-income families and generating a cycle of debt that exacerbates economic hardship.
The industry says that it provides a valuable service by helping its customers cover emergency costs and that the industry’s interest rates are less expensive than bank overdraft fees or late bill payment penalties.