As both an African American civil rights leader and a Republican, I have spent my career promoting free-market reforms to empower my brothers and sisters who disproportionately fall into low-income brackets. I have even supported some people who work in the payday loan industry when they abide by ethical practices aimed at protecting consumers. But now I am calling out some Kansas City-area-based lenders who donate primarily to Republicans for their callous treatment of African Americans.
In the past, I have joined many local civil rights groups in supporting microcredit — sometimes described as payday loans — because I believed this could transform lives by offering easy access to credit for lower-income families. People use credit to lift themselves up, to start businesses, to secure degrees, to buy homes and to take care of emergencies.
As spokesman for CORE, the Congress of Racial Equality, I have worked very closely with the industry. From 2007 to 2009, CORE spent time alongside the Community Financial Services Association and Moneytree, Inc. to develop and to promote their Consumer Bill of Rights. Our group gave special recognition to Dennis Bassford, Moneytree’s chairman and CEO, for promoting meaningful consumer protections.
Unfortunately, in the past decade, a few questionable Kansas City-based individuals have tainted an industry that is important for minority communities in desperate need of credit. Acting outside industry norms, these payday lenders allegedly sought to trick and ultimately to drain the slender savings of our nation’s most vulnerable citizens.
For too long, politicians — particularly Republicans — have accepted money and advice from some of these unscrupulous operators who have been shunned by reputable lenders.
Consider Scott Tucker, who gave generously to the Republican Party as he built a fortune through a payday lending scheme that federal prosecutors said ripped off as many as 4.5 million people with loans of 600% interest rates. Tucker was fined $1.27 billion and sentenced to more than 16 years in prison.
Yet Kansas City is still home to many bad actors in the payday lending industry. Right now, Kansas City-area residents Scott Asner, Joshua Landy and Richard Moseley are being sued by Virginia residents under the Racketeer Influenced and Corrupt Organizations or RICO Act, which was created to crack down on organized crime. The businesses named in the suit are largely operated out of a call center in Overland Park. Seven plaintiffs allege that that these lenders collected unlawful debts through their allegedly usurious lending practices.
The lawsuit, filed in federal court, alleges that Asner, Landy, Moseley and others received millions of dollars from unlawful debt collection, and conspired to repeatedly violate state lending laws. The plaintiffs say they were duped into taking out loans with interest rates ranging from 543% to 919%. Since the payday loan companies operate online, the plaintiffs say they were unaware that the loans would not be subject to the laws in Virginia — where they reside — which limit interest rates to 12%.
Another individual from the Kansas City area deeply involved in business dealings with Asner is Michael Gortenburg, who has given at least $80,000 largely to Republican candidates and committees in the past two decades, including to now-Secretary of State Mike Pompeo’s campaign for the U.S. House.
The party of Lincoln should be obligated to speak out against those who prey upon the weakest among us. We should work hard to help free the powerless from financial slavery. The GOP should return any donations from payday lenders and champion reforms of the industry.
Niger Innis is the national chairman of the Congress of Racial Equality.