Suthers Sells Out to Payday Lenders?

After everything we’ve been through in our long campaign of retribution against payday lending spammers on our blog, which culminated in passage this year of long-sought legislation against the worst excesses of this industry after many attempts, we have to admit that today’s story in the Grand Junction Sentinel upsets us on an editorial level. Having said that, Charles Ashby reports the facts, which are quite enough by themselves:

Colorado Attorney General John Suthers has accepted thousands of dollars in campaign contributions for his re-election bid from numerous payday lending companies at the same time his office is considering new regulations of the industry.

Those new rules, which have not been finalized, are required under a law that went into effect Wednesday. The law is designed to clamp down on exorbitantly high interests rates that payday loan companies were allowed to charge, sometimes as high as 500 percent a year…

While some of the companies contributed to numerous Democratic and Republican candidates over the past eight years, only one donated to Suthers in the past, and then only $500 when he ran for attorney general four years ago. [Pols emphasis]

“This just doesn’t pass the smell test,” said Rep. Mark Ferrandino, D-Denver, who introduced the new payday lending law, which narrowly won approval in the House and Senate earlier this year. “The fact that they only gave money when he was doing these final rules, that more than ever really raises flags. There’s something fishy going on.”

According to the Sentinel, the revised payday lending rules as proposed by John Suthers’ office are not as stringent as what the new law provides for. Suthers claims that the new law was ‘poorly written’ (standard cover for disparaging a bill one doesn’t like, they’re often worded a little confusingly after being amended repeatedly), but even a legislative staffer quoted who agrees complains that Suthers’ proposed rules don’t meet the standard of the new law–and apparently widen loopholes that would allow payday lenders to exceed the new limits.

If that’s right, this story could be a big headache for Suthers on several levels. For one thing, Suthers has always represented himself as a fair arbiter in the long fight over payday lending. It’s very difficult to find someone in office willing to defend 350% or higher interest rates, so the defense of payday lending usually occurs on oblique grounds–the number of jobs involved and so forth. But here you have Suthers, if the opinion of this legislative staffer is to be believed, weakening the new and hard-won law that protects people from those inexcusable rates!

But it shifts from interpretive disagreement to serious problem with the receipt of thousands in payday lender donations during the period his office was drafting these rules. Prior to that time, as Gary Harmon does an excellent job of laying out, Suthers had not taken a significant amount from the payday lending industry, and could use that to deflect questions about his commitment to regulating them. To take money from 11 different payday lenders out of the blue, during the exact time he was directly responsible for new and hotly contentious regulations over the industry–especially now that those new regulations are being questioned–is a campaign spokesman’s nightmare, and if he seizes on it, a priceless gift to Democratic opponent Stan Garnett.

It’s not about whether it’s expressly illegal, and nobody alleges that in this story. Like we said about Scott McInnis’ plagiarism, and other issues that are legally without “controlling legal authority” but ethically obvious, it’s what it looks like that matters: the ads write themselves.

39 Community Comments, Facebook Comments

  1. DavidThi808DavidThi808 says:

    First off, the donations almost certainly were because he’s writing these bills. And Suthers then writing inadequately weak regulations sure looks bad.

    But do we then accept that Bennet’s receiving a large set of donations from Wall St affected his votes on the amendments on the financial regulation bill?

    The need to raise large amounts of money from the people your actions effect is a very corrupting influence in our politics. The equation is what do Wendi about that core problem? Because pointing to a specific case like this will justnlead to the Repiblicans pointing out what our Democratic members do.

    With that said, I think John Suthers needs to speak to the questions raised.

    • You need to check your facts Dave.  And, it was the senate Dems who really screwed this pooch.

      • DavidThi808DavidThi808 says:

        The question is what grounds does Suthers have to not propose regulations that meet the requirements of the bill. If an AG can void any bill because they think it’s badly written, then the legislature might as well not show up.

        • ” . . . because he’s writing these bills.”

          I would like to add to your statement, that if the legislature can’t write more thoughtful legislation, less ambiguous — less rushed — less internally inconsistent — and less open to “misinterpretation” — then, I agree, they might as well not show up.

          • LakewoodTodd says:

            I think David meant “because he’s writing these rules.”

            • do you go by someone’s divination of intent, or do you go by the words written?

              • DavidThi808DavidThi808 says:

                We have numerous people who do understand the details claiming that Suthers’ proposed regulations don’t meet the requirements of the bill. Suthers’ statement is the bill sucks. That’s not a defense of his regulations.

                Now if his regulations do meet the bill – fine. But your response was like Suthers’ – any regulations are ok because the bill sucks.

                I don’t find that acceptable.

                • You can’t make a silk purse out of a sow’s ear.

                  Did I say any regulations are OK?

                  The regulations suck?  Perhaps.  Does the legal foundation for the regulations suck?  Like a vacuum cleaner.

                  When do you ever see me shill on this site for anyone?  When do you see me supporting any Republicans?  

                  You’ve got people?  — with an agenda, David.  In this case I think the people making the accusations owe at least as many answers to questioners willing to become informed, just as you say Suthers has questions to answer.

                  • You asked David:

                    Did I say any regulations are OK?

                    Below, in response to my question whether you think the regs are consistent with the law, you replied:

                    Yes, as much as possible, given the nature of what the legislature produced.

                    Seems to me that, in fact, you did say the regulations were OK, “as much as possible.”  I took from your answers that you are familar with both the regulations and the law.  Are you?  If so, are you opining clearly that the regulations are consistent with the law, to the greatest extent possible?

                  • DavidThi808DavidThi808 says:

                    That it is almost impossible to prove a negative. Someone could give an interpretation of why the regulations don’t match and Suthers can then say “but there’s an interpretation where they are…”

                    This requires the person writing the regulations to explain their logic. And if the regulations do match the law, it should be easy for John Suthers to do so.

                    • say, “someone” with a radio show could ask Suthers.

                      To do that, however, “someone” would have to come up with some specific language from the law, and then “someone” would then have to come up with some specific language for the regulations (that seems to be inconsistent with the law) and then “someone”, would have to ask Suthers, “How, did you come up with this specific regulation verbiage, given the specific language of the law?”

                      “It should be easy for (“someone”) to do.”

                      Until then, this diary is asking Suthers to prove the negative — prove your regulations don’t misinterpret the law.

        • anyone has a provable case that any regulations improperly implement any law, they can bring that challenge to a court and a judge could strike down, or modify, or otherwise amend the implementation of those regulations.

          All anyone would have to do is have a provable, winnable case.  (The bar to a having a newspaper article is much lower, and much less factually demanding, however.)

  2. khmeck says:

    Lest you start to think too highly of our ill-esteemed fourth estate, it should be known that the Garnett campaign posted/emailed about this very story late Thursday night. I wonder which organization, Garnett’s campaign or the GSJ, is more willing to let the other handle researching Suther’s donors. Oh wait. No I don’t.

    What will make this a particular ethical lapse a major gift to Garnett is how he can play it against his no PAC money commitment. Can anyone else think of a campaign that made remarkable gains in the polls with a ‘the-other-guy-takes-bad-money-but-I-don’t’ message? Meanwhile Garnett doesn’t need to come from behind.  

  3. blame Suthers for the spectacularly poor manner in which Rollie Heath, Chris Romer, and the other senate Dems amended the original bill at, literally, 7:00 pm on the evening before the final reading the next morning in the senate.

    • DavidThi808DavidThi808 says:

      If not, then he needs to tell us why. Last I heard the AG doesn’t get to decide which bills are enforced and which ones are ignored.

      • but implying they don’t without apparently having the answer.

        Have you read the proposed regulations vis-a-vis the bill that was passed?

        • JeffcoBlueJeffcoBlue says:

          The Sentinel quotes a nonpartisan leg staffer, who I trust more than the partisan staff from either side, saying that

          1. The law was not as well written as it could have been. The Pols note that these laws get a little spaghettied during the amendment process, and that’s no excuse for rulemaking that doesn’t live up to the law. I agree.

          2. Despite flaws in the law’s language, the staffer quoted by the Sentinel says Suthers’ rules fall short. Rep. Mark Ferrandino, the bill’s original author, seems to agree.

          That’s enough to put the onus back on Suthers.  

    • …whether the proposed AG regulations are consistent with the law as enacted.  Are you trying to link up the 2 issues?  ‘Splain yerself.

      • the regulations aren’t reflective of the language of the final bill.

        I wrote here last May that this bill as amended by the senate was a disaster for consumers.  I also wrote that it was closer to the Bay of Pigs than PT109.  (David wrote that I was being unfair.)

        Now, we find out that this did consumers no great favors, and everyone is surprised? Shocked?

        • Where in hell did I presume that?  Nowhere, and no place, that’s where.  I don’t have the foggiest idea whether the regulations are “reflective” of the law as enacted.  But this diary seems to ask that question.  Your post rushed by that question to raise a seemingly unrelated point about some allegedly flawed process in the law’s enactment.  I asked whether your point and the subject of this diary were related. And now you chime in with a presumption about my alleged presumptions.  Projecting!

          And, speaking of random presuming/projecting, I didn’t express surprise or shock about whom this law favored or not.  Your reply appears to be misdirected entirely.

          • I, more correctly, should have written that this diary appears to presume . . .

            My point is that to pass a horribly amended bill, and then point fingers at Suthers (for obstensibly not being sufficiently consumer protective) is wholly disingenuous.

            The allegation is that Suthers wrote regulations inconsistent with the bill.  It’s a fine allegation, but it isn’t true.  The legislature did Suthers no favors by expectorating such a horribly written, unclear, internally inconsistent piece of garbage.

            I’m with the consumers on this, and the problem isn’t Suthers or some alleged misinterpretation of terribly, horribly constructed legislation.

  4. marilou says:

    Leave the market alone.  Word gets around.

    • however, there was never any true “market.”  The lender’s held all the cards and all the information, and have been taking advantage of the distressed and the misinformed.

    • Ralphie says:

      I mean after all, there’s a market for loan sharks, bookies, and prostitutes, among other professions.

      If there were no compulsive gamblers, there would be no market for bookies and loan sharks.  If all men were happy with their wives, there would be no market for prostitution.

      The free market drives all. None of these things should be illegal as long as there is a market for them.  

    • JeffcoBlueJeffcoBlue says:

      While we’re at it, let’s get rid of extortion laws. I think those poor shop owners want to be “protected,” as the robust market for “protection services” makes abundantly clear.

      Slogan meets reality. Slogan loses.

    • And when the pot shops and (eventual) free heroin shoot-up clinics cluster around schools, word will get around and the market will respond: non-graduate adults will go back to school and others will start hanging around for parent-teacher conferences. Win win, I say. Ah, that good old “market.” Whatever the hell that is.

  5. st0ry says:

    Just think… if we reformed campaign finance we probably wouldn’t even be having this discussion.

  6. I am neither a pay day lender, nor do I use their services. I did work at the Capitol when this issue first arose. In my job, I took calls from users of pay day loans. Most of them were opposed to new legislation. So I wonder who benefits from this legislation? My guess is the politicians who sponsor the bills, because it makes them look caring.

    When talking about the APR for these loans, you have to realize that they are short-term loans, so talking about the Annual Percentage Rate is misleading.

    The users of pay day loans mostly stated they were not stupid, and did not need to be protected from themselves. In fact, taking away legal options may just force them into using illegal providers. In my opinion, this was the legislature jumping into a non-problem just to score political points.

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