Post reporter stands out for asking predatory lender about Colorado profits

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by: Jason Salzman

(Credit where due – Promoted by Colorado Pols)

A predatory-lending bill, allowing lenders to make more money on high-interest loans, passed a state senate committee yesterday, with supporters of the bill telling reporters that increased profits are necessary to keep personal-loan lenders in Colorado.

That’s the major argument for the bill. Specifically, backers told the Durango Herald that the one company offering such loans will leave Colorado if it’s not allowed to make millions more here.

The Denver Post’s Joey Bunch was the only reporter to ask Springleaf Holdings, Colorado’s only lender of personal loans (after a merger last year with its competitor), how the company was doing. I mean, that’s the key question.

Is it struggling to make ends meet, like many of the folks it lends money to are? People who pay the company 36 percent interest on a $1,000 loan as it is?

Phil Hitz, who represented Springleaf Holdings, acknowledged that the company is very profitable nationally and confirmed the 30 percent Colorado growth over the past four years.

Bunch apparently didn’t ask Hitz if Springleaf would leave Colorado if the bill didn’t pass, but all indications are that it would not.

Last year, when a similar predatory-lending bill was debated, the Colorado Attorney General’s office testified that access to such loans is not threatened under the current interest-rate structure. Similar testimony was reportedly offered yesterday as well.

So the bill’s backers haven’t refuted the key point that lenders of personal loans are profitable and thriving. In fact, the market in Colorado is actually growing. There’s no indication that the lenders will walk away from Colorado and its money.

To be fair, Hitz told Bunch that Colorado is the company’s lowest yielding state, and other states help subsidize it.

But lowest yielding state compared to what, astronomically-earning ones? We know the company is “very profitable” nationally. So the fact that it’s doing well enough in Colorado is a signal that states should protect consumers, many of them low-income, and adopt Colorado’s humane regulatory framework.

That’s another conversation reporters might have with Hitz.

10 thoughts on “Post reporter stands out for asking predatory lender about Colorado profits”

ajb says:

April 20, 2016 at 12:36 pm

30% growth over 4 years? If they leave, somebody else will take their place.

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1. BlueCat says:
  
  April 20, 2016 at 12:49 pm
  
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  1. MichaelBowman says:
    
    April 20, 2016 at 2:49 pm
    
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Diogenesdemar says:

April 20, 2016 at 1:48 pm

What? Isn't this just exactly the way things are supposed to work out for AIG in a post-taxpayer-bailout monopoly market??!??

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Diogenesdemar says:

April 20, 2016 at 2:01 pm

A Ray Scott sponsored bill in front of a Finance Committee majority of Tim Neville, Owen Hill, and Chris Holbert to increase Hitz's overlords’ usurious profits (a lobbyist's wet dream, eh?) …

… I predict that if Speaker Hullinghorst doesn't assign this to a House kill committee, this pig-bill passes.

(Hick' won't veto this this election year, his stated objection last year was the rushed process.)

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1. Jorgensen says:
  
  April 21, 2016 at 1:09 am
  
  I hope your predictions are wrong. There are loan sharks taking advantage of low income earners primarily. This is ugly. I truly hope Hickenlooper will veto this bill if it passes. If not, Hickenlooper will look like a two-faced idiot who helped create a recovery center at Fort Lyons but screwed over poor families and individuals with this bill. And yes, I do realize that some of these people are drug abusers, but others are just trying to pay rent and put food on the table for their families. So, Governor let's help the families… it's really tough out here in the real world. Or Hick, are a shark too?
  
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James Dodd says:

April 21, 2016 at 5:04 am

Does anyone have an explanation why a Democrat, Jovan Melton, is the House sponsor of this bill?

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1. Duke Cox says:
  
  April 21, 2016 at 5:26 am
  
  Never met a sold out Democrat, James?
  
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2. Duke Cox says:
  
  April 21, 2016 at 5:39 am
  
  Seriously, though….I have always called it "supermarket politics". You may have heard me say something about one of the DLC types listening to their corporate friends. I say that because that is how politics works. There is some aspect of Representative Meltons' private life (a friend, relative, etc.) that puts him in a position to invoke the powerful "suspension of disbelief" principle and do something that is anathema to his purported mission or world view at the behest of someone whom he trusts implicitly.
  
  I have met a number of legislators and politicians who use this principle…notably my favorite hypocrite, Governor John Frackenlooper. The inherent denial associated with his claim of drinking "fracking fluid" is so obvious it takes a very powerful bond with those in his trust circle.
  
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  1. Pseudonymous says:
    
    April 21, 2016 at 9:19 am
    
    I won't argue about the influence of industry money on pols, but the reason I believe that Rep. Melton (and 31 of his Democratic colleagues, if I'm doing the math right) voted last year and will likely vote this year to support this bill is that it's something they can focus on without having to do the real, hard work necessary to create an alternative.
    
    Bridge lending in poor communities is a necessity. Many of these folks lack the level of income or savings necessary to weather significant life events (car breaks down, medical bills, etc.) and can borrow only in amounts that aren't sufficiently lucrative for banks and credit unions to take the business. To actually fix this, the government would need to create real income supports or to establish and fund some form of CDFI (community development financial institution) that could bank and lend to these communities on more reasonable terms. Both of those are hard. Giving loan sharks another ounce and a half of flesh is easy, and avoids the condition where they put the only lenders who will play out of business, while also allowing them to ignore the need for real solutions.
    
    There are some glimmers of hope. It's important to remember, if you read the article, that payday loans in other states have 200-300 percent interest. The loans referenced in the article run from 25-36%, but are also repaid over a year with automatic withdrawals from borrower paychecks, financial planning advice,
    
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