BREAKING: Midnight Payday Payback, Anyone?

WEDNESDAY UPDATE #6: FOX 31’s Eli Stokols:

After a tense final 24 hours to the legislative session, House Republicans blinked first in a high-stakes game of chicken over a payday lending amendment to an essential rule review bill.

The decision by the House GOP, following a long day of negotiations, will allow the state to avoid an expensive special legislative session that would have been called by Gov. John Hickenlooper had the rule review bill not been passed…

After meetings with Hickenlooper, McNulty and the House GOP caucus took up the bill around 6:15 p.m. and, after a short speech, adopted a motion by Rep. Bob Gardner, R-Colorado Springs, to recede from its earlier position and adopt the Senate bill without the payday lending amendment.

Gov. John Hickenlooper is pretty much universally getting the credit for ending this, and his blistering of Republican hides in the most explicit terms we’ve seen since he took office is a big reason why this battle turned so spectacularly against Speaker Frank McNulty.

Who is, bipartisan lip service aside, the unconditional loser.


WEDNESDAY UPDATE #5: Blink. McNulty loses. The “Midnight Payday Payback” is dead, 65-0.


WEDNESDAY UPDATE #4: Senate votes to adhere to their version of Senate Bill 78. “Payday payback” amendment stripped from the bill, which now goes back to the House. One Republican, Sen. Ellen Roberts, broke with her caucus and voted to adhere to the original version.

Now the decision to convene a $21,000-a-day special session to decide the fate of the “payday payback,” or not, rests with Speaker Frank McNulty and his House GOP caucus.


WEDNESDAY UPDATE #3: New statement from the Senate Majority Press Office–full text after the jump. Says Majority Leader John Morse:

By taking this bill hostage, McNulty has shown that he cares more about predatory lenders than the well-being of Colorado teachers, oil and gas producers, hunters, the poor or the elderly. Frank McNulty is standing up for predatory payday lender organizations while making Colorado citizens feel like they’ve been slapped with a wet leather glove.


WEDNESDAY UPDATE #2: Amended “payday payback” Senate Bill 78 passes House on a party-line 33-32 vote. Last night, Tim Hoover of the Denver paper reported that Democratic Reps. Ed Casso and Sue Schafer, sponsors of the earlier failed House Bill 1290 “payday payback,” were originally on board with this amendment, but sensibly backed away as the controversy grew. The lone Democratic vote yesterday in favor of the amendment from Rep. Rhonda Fields was reportedly made in error–and wasn’t repeated today.


WEDNESDAY UPDATE: Numerous sources now reporting that a special session to deal with the House GOP’s last-minute “payday payback” amendment to the rules review bill is a real possibility–the Senate has no plans to adopt this amendment, and will reportedly adhere to their original version. If the House doesn’t back down from their brinksmanship on behalf of payday lenders, hundreds of critical rules in this bill on a daunting range of issues will expire.


UPDATE #3: Press release from House Democrats explaining the situation, as well as the consequences if the rules review bill isn’t passed, after the jump. Says Minority Leader Sal Pace, “Shame on the Republicans for hijacking this straight-forward and very necessary bill for their special interest cronies. This is the wrong way to end the session.”


UPDATE #2: Gov. John Hickenlooper’s office steps in, according to the Denver paper via Twitter, calling the payday loan amendment to the rules bill an “irresponsible” “poison pill.” The consequences of not passing this normally routine rule reauthorization are actually quite serious–literally hundreds of rules are reauthorized in SB-78. Gov. Hickenlooper is saying unequivocally that he won’t subsidize this high-pressure, last minute tactic to hold all of these rules hostage.


UPDATE: We’re hearing, and evidenced by a procedural vote a short while ago, that House Democrats are not playing ball with this “backdoor attempt” to subvert payday loan rules–that includes Democrats who co-sponsored HB-1290, the failed original “payday payback” bill.


Speaker Frank McNulty, the House Republicans, and maybe a few Democrats are up to mischief on behalf of payday lenders–right now–as the Colorado Independent reports:

The payday lending industry isn’t giving up on this legislative session in Colorado. Lawmakers who have failed at several attempts to roll back regulations passed last session limiting high payday interest rates and fees are now reportedly planning to attach to a bureaucratic rule-making bill an amendment that would thin the payday regulations. The legislative session ends at midnight tomorrow.

The bill, Senate Bill 78, is this year’s version of an annual bill that extends all the rules and regulations passed by the legislature. It’s a fairly formal exercise but the bill also includes a list of rules and regulations the legislature chooses not to extend. Rep. Bob Gardner, R-Colorado Springs, is leading the charge for the payday industry, introducing the amendment that would add the payday regulation laws passed last year to the list.

It’s a bold- some would say brazen- strategic move, given that payday industry arguments have been voted down time and again and in light of the fact that there is so little time to debate the issue. Indeed, the point seems to be to avoid debate…

Whatever debate there will be is presently underway, we’ll update when we receive more information. And in our continued quest to give payday lending spammers the middle finger, we promise to highlight front and center every legislator who supports this effort and their connection to the industry.

Payday lenders have failed twice in the last two years, and we’ll be sure to keep a spotlight on all last-minute efforts to ram their agenda through again. As a reminder, here’s another look at how your Representatives voted on the last effort.

In the meantime, who says $50,000 can’t buy you love?

House Dems. Slam GOP’s Last-Minute Special Interest Giveaway

(Denver) – This evening House Republicans jammed an amendment onto SB11-078, the General Assembly’s annual rule-review bill, to undo fair rules regulating the payday lending industry.  The move was a shameless special interest giveaway in the last hours of the 2011 legislative session, and one that could ultimately undermine core and critical functions of government and public safety.

The rule review bill requires executive branch agencies to submit new or amended rules to the Office of Legislative Legal Services.  The statute directs staff to review the rules to determine whether they are within the agency’s rulemaking authority.  The staff performs rule review under the direction of a legislative committee, the Committee on Legal Services.

If the rule review bill is not passed, rules promulgated during the previous year would expire on May 15th of this year.  This in turn would threaten the most basic functions of Colorado government; everything from controlling Colorado’s greenhouse gases to annual hunting seasons would be in peril.

If the bill passed with the payday lending handout, the Senate could adhere to their original position, which would then send the bill back to the House.  At that point Republican leadership would have to decide between doing the right thing by stripping the amendment, or killing the bill.

House Democratic Leader Sal Pace (D-Pueblo) made the following statement about the amendment:

“Shame on the Republicans for hijacking this straight-forward and very necessary bill for their special interest cronies.  This is the wrong way to end the session.”


Speaker McNulty threatens well-being of Coloradans to help predatory lending industry

“McNulty has shown that he cares more about predatory lenders than the well-being of Colorado teachers, oil and gas producers, hunters, the poor or the elderly.”

DENVER-Today, Senate Majority Leader John Morse (D-Colorado Springs) released the following statement on the last-minute hijacking of the Rule Review Bill (Senate Bill 78) by House Republicans:

“By taking this bill hostage, McNulty has shown that he cares more about predatory lenders than the well-being of Colorado teachers, oil and gas producers, hunters, the poor or the elderly. Frank McNulty is standing up for predatory payday lender organizations while making Colorado citizens feel like they’ve been slapped with a wet leather glove.”

In a last-minute procedural maneuver, Republican House Speaker Frank McNulty is holding up a bill that is needed to govern nearly every function of government and affect every Coloradan. McNulty and House Republicans attached an amendment to Senate Bill 78, the “Rule Review” bill that will dramatically increase the amount that people will pay when taking out a short-term “payday” loan. This last-minute action is an attempt to overturn great work done by state agencies to implement rules for state and federal laws passed in recent years.

Among the rules affected:

This bill will cost Colorado approximately $800 million from the loss of a full hunting season. Those losses will come from the fees paid for licenses and permits as well as the lost revenue for restaurants, hotels, and other retailers who rely on hunters for a significant part of their business.

The implementation of HB09-1293, which changed the formula for hospital provider fees and made other significant changes to the Colorado Indigent Care Program (CICP), Medicaid, and the Child Health Insurance Program (CHIP). The hospital provider fees alone amount to $795 million in increased revenue for the state that come from federal matching funds and the changes to Medicaid alone resulted in 30,000 new Coloradoans receiving coverage. Undoing these rules will take away health care from some of our neediest people on the Medicaid, CICP, and CHIP rolls.

This will also throw schools and teachers into chaos as their licenses and accreditations lapse and they have to wait for the Colorado Department of Education to rebuild the rules regarding how to renew those licenses and accreditations.

Finally, this will cost the state an estimated $85 million to recreate the greenhouse gas emissions standards that are part of the State Implementation Plan (SIP) for air quality control.

This last minute maneuver by House Republicans comes on the final day of the 2011 legislative session. It could lead to a special session which would cost the state an additional tens of thousands of dollars per day.

66 Community Comments, Facebook Comments

  1. thiokuutoo says:

    Any Dem who votes to let these leeches stay in Colorado needs to be recalled and voted out of office.

    • Libertad says:

      Don’t you understand the important function that this loan industry segment provides?

      Oh the drama … maybe it’s time to get your irresponsible leftist advocates to crank up their noise making machines.

      • Middle of the Road says:

        Not a single one is factual but when has that ever held you back.  

        • Libertad says:

          pointless drivel.

          Maybe if you had your radical leftist advocacy machine turned on you could impact this issue. The machine is not on, therefore I conclude your people are not really that interested in using or exploiting their political and forced union capital.

          • Middle of the Road says:

            But again, you managed to get all the buzzwords and talking points into one small paragraph so I say congratulations, sir. You are earning your pay. Now tell your paymasters to get their heads out of their asses and start doing something that actual creates jobs instead of fucking over poor people.  

            • sxp151 says:

              Your average right-wing inheritor of millions has no idea what a “job” is, so “creating jobs” might as well be “feeding unicorns” or “exploring Alpha Centauri.” If however the interest payments on that inheritance are ever threatened, you can bet poor people will be fucked over.

      • DavidThi808 says:

        Then why stop at usury? If we let minors purchase alcohol & cigarettes I’m sure that would mean more jobs. Why the list is endless…

        • Libertad says:

          Nice try to divert the conversation David.

          Service users choose to use this product for various reasons, one of them might be to enhance their financial strength and another might be to pay off their debts to others and another might be to enjoy some consumerism by taking on new debt.

          As a business guy you should get it …. sources and uses. That hardly is equivalent to providing easier access to pot, beer or tobacco for kids.

          • cdsmith says:

            This bill got every bit as much a fair shake as plenty of other bills this legislative session, and it failed.  NO ONE should be supporting the hostage situation that House Republicans are trying to create, threatening to wreck the state unless we let them pay back their special interest donors.

            If they actually think this is a good idea, they should run campaigns on it and try to elect more members to the the state Senate so it can pass.  Holding the state of Colorado hostage is not an okay answer.

          • Aristotle says:

            Service users choose to use this product for various reasons, one of them might be to enhance their financial strength and another might be to pay off their debts to others and another might be to enjoy some consumerism by taking on new debt.


            “Enhance their financial strength?” A short term loan to pay your bills doesn’t do that. What a whopper.

            As for the rest of this sentence – Libby, only you and your dipshit Republican friends can so blatantly say indisputably bad things like these are good.

          • ClubTwitty says:

            literally, who am I to stand in the way?  

            Perhaps its a wise business choice to jeopardize limb for another chance at success–that might be the winning ticket afterall!

            Why be concerned with lenders hiding obscure obligations in ever finer print?  We can buy magnifying glasses! That creates jobs.  

            If capital in all its wisdom declares it good–it must be.  Government’s job is merely to go away and let the collective wisdom of the Corporate Masters ‘Invisible Hand’ decide!  

            And, who is John Galt and why hasn’t Libby followed his lead?  

      • Craig says:

        You don’t have any and this is why this attempt keeps failing.  Everyone should boycott Libertad’s posts.  They’re simply the monring talking points out of Republican HQ or perhaps out of the House Majority office itself.

      • Cordelia Chase says:

        you mean taking advantage of low-income working families who are in a desparate situation, then that is just messed up.

        The reality is the jobs they create pay so little the people working there can usually qualify for public benefits.  Other loan products exist that offer a reasonable interest rate for working families. There really is no reason for this industry to even exist.  

    • Ignatius O'Reilly says:

      Why isn’t Hick stopping this jackassedness by vowing to veto it?

      Because he’d sign it (or at least let it become law)!

      Hick: More interested in popularity than principles.

      • Ignatius O'Reilly says:

        I skipped over that. Still, Hick is more interested in the way the bill is being run rather than the content of it. He indicated earlier this session that he’d be game for some rollback of last year’s law.

        • cdsmith says:

          so he’s on the wrong side of the issue; that’s fine, plenty of people are.  What shouldn’t be negotiable is that trying to pass it by attaching it to critical business after it failed is far out of bounds.  Congratulations to Hickenlooper and every Democratic cosponsor of the original repeal bill for getting that right.

          • WitnessProtectionForGeeks says:

            The GOP likes to take hostages.

            Federally Democrats usually pay the ransom.  I have more faith in our state D’s

            Don’t concur.  Kill the bill. Governor call a special session to do the rule bill.  Come up with a “midnight gerrymander name” for this procedural bullshit.  Remind the tax payers just picked up the tab for the GOP’s payback to payday lenders. Cram it down their throat.

  2. Libertad says:

    Paycheck advance services provide a valuable asset to those you proclaim to protect.

    The FDIC Center for Financial Research found that “operating costs are not that out of line with the size of advance fees” and that “unusually high rate of default losses,” restrict profits. Loan losses can average 15% or more of revenue.

    These lending services extend uncollateralized credit to high-risk users, they provide loans to poor households when other financial institutions will not.

    Allegations against the payday-lending industry are  without merit, and reflect the views of “do-gooder” anti-capitalist elites.

    • Middle of the Road says:

      radical libbers


      anti-capitalist elites

      No, wait, you missed Communists and Socialists. Ooh, darn. So close, too.  

    • Diogenesdemar says:

      is exceeded only by your first-rate ignorance in general; your lying is, as usual, only second-rate.

      Payday loans are not the “micro-credit” that has helped build some prosperity for some recipients in third world countries at reasonable rates over extended periods of time.  Payday lending is not intended to be repaid; it’s a cynical mechanism for sqeezing regular and repeated fees from desperate folks in desperate circumstances.

      Statewide loan losses in Colorado have been historically well under 5% of operating revenue year after year.  And, for those few lenders who experience higher losses it is 100% fully attributable to their refusual to do any responsible underwriting of their loans to ensure that they don’t grant credit to those folks who are already underwater and have no ability to repay their existing obligations, let alone the new debt at usurious rates.

      Now go ahead and tell us everything else you think you know, I’ve got another ten seconds.

    • jadodd says:

      When I began my legal career some 30 years ago, I put people who charged the kind of interest the “payday-lending industry” charges in prison for loan sharking.  Like loan sharks the “payday-lending industry” preys upon the poor and uneducated.  We need to stop dignifying what they do by using euphemisms like “payday-lending industry.”  They are loan sharks – plain and simple.  As far as I’m concerned this is or should be criminal.

    • Cordelia Chase says:

      Other financial institutions will lend to these borrowers – take a look at your local credit union. That is a myth the payday loan people keep spreading – they are the only ones who will help these people.  It’s simply not true.

      The default rate on these loans is somewhat higher, but not enough to justify the interest rate.

      And the loan does have collateral – you leave a post-dated check that they cash.  They have access to your bank account and send you to collections pretty quickly.  

  3. DavidThi808 says:

    I’ll pay to get TABOR overturned. Who do I write the check to?

  4. DavidThi808 says:

    Are they taking it the wire over education? over jobs? over our archaic tax system?

    No, they’re holding everything up to repay some lobbyists. This is contemptuous.  

  5. Ralphie says:

    Ball is in the Senate’s court to adhere?

  6. bullshit! says:

    This is not going the way they expected. This was supposed to be quietly done – was the Senate supposed to let it happen? Did Shaffer just totally sandbag McNulty?

    Either way, McNulty is now waaayyy out on a limb…

  7. caroman says:

    I want the pictures the payday industry must have of the GOP legislators in compromising positions.  There is no other sane reason why the GOP is doing this.  

  8. For Colorado GOP legislators, it’s apparently payday payback.  In Wisconsin, the GOP will go down in a blaze of glory taking out union rights.  And at the Federal GOP level, it’s apparently killing off our social safety net that’s important enough to go to the wall to send our country in to default.

  9. Ralphie says:

    is currently being debated in the Senate.

  10. abraham says:

    I know you guys love to gleefully take shots at the Republicans, and that’s OK.  But on this particular issue, I happened to be in the gallery.

    It is true that the Republicans over reached with their ill advised payday lender amendment – but the regulators over reached as well.  There is a pretty sound argument that the regulators went beyond their authority.  But two wrongs do not make a right, and three or four wrongs don’t make it better.

    The Senate Democrats have nothing to be proud of.  They provoked a confrontation when one was not necessary.  The regulators could have promulgated a new rule with some modifications and it would have accomplished what was necessary.

    Actually I thought Bob Gardner and Frank McNulty were quite statesman like at the microphone on the motion to recede.  Sal Pace also was statesmanlike and came across well.

    The confrontation is over and having watched the give and take today, I think actually the House Republicans came about a bit better than did the Senate Democrats.

    • ajb says:

      1. A Republican AG wrote those rules, remember?

      2. A last second, last gasp, slime-ball amendment? You sure you want to call that the mark of a “statesman”?

      And if there’s a sound argument for interest rates over 300%, I’d love to hear it. Libby tried earlier, but…

    • droll says:

      This wasn’t about regulations, this was a hostage negotiation. The legitimate bill died. Legitimately. I fail to see how any amount of statesmanship could make up for this act.

      It’s like if a football player is ruled out of bounds and their touchdown doesn’t count. The player disagrees. Then waits for the last two seconds of the game to take the ref at gunpoint. “Say it counted!”

      Maybe the player was out of bounds, maybe he wasn’t. Either way, it’s just inappropriate. And saying just kidding and letting the ref walk away isn’t grace. Especially when you’re surrounded by the SWAT team.

      But that’s just me.

    • Awen says:

      I was there, when the UCCC held its hearing on the rules, and I was on the floor of the House AND Senate when the rule review bill was going through the process this week…


      The problem with stating that the agency overreached is that the agency did everything in its power to find out what Heath’s intention was regarding the origination fee, and Heath never responded to ANY requests for information from the UCCC staff. In addition,

      In announcing her decision regarding 17(I)3, Udis said she was influenced by the testimony and written comments, and one other factor – an amendment offered on second reading in the Senate by Sen. Lois Tochtrop, D-Adams County. Udis said Tochtrop’s amendment, L025, would have clarified that the origination fee was not subject to refund, but the Senate did not adopt it. “The Senate could have made the change if [senators] thought the origination fee was not refundable,” Udis said. She also explained that she and the committee are left with conflicting legislative intent from Heath, Romer and Ferrandino, and in that case she has to go back to the language of the statute regarding the APR. “If that is not the intent of those in the process, the remedy is that [the law] be amended in the next legislative session,” Udis said.

  11. Diogenesdemar says:

    but, I can’t help but think this little House shenanigan has been in the plotting by McNulty and crew for some time.

    In most recent previous years the rules review bill is pretty pro-forma, and is ususallly kicked through the legislature without any controversy by mid-April.  This was true for 2010 and 2009.

    Even when rules have been amended they have been done so much earlier, without today’s end-of-session brinksmanship.  In 2008 the amendments were voted on and passed April 28.  In 2007 the amendments were passed on April 25.

    I can’t remember a single year where the rules review went into the final two days of the session.

    • BlueCat says:

      McNulty has been thinking that many moves ahead.  

      • dukeco1 says:

        of his predecessor. IIRC, Prince Josh of Happy Valley was the previous republican leader. Perhaps the current predicament faced by the Colorado GO(T)P is partially the result of the poor leadership of these two political lightweights.

        I know both gentlemen very well. I am not impressed with either (and, of course, neither is a member of my fanclub).

        per abrahams’ comment above…

        Bob Gardner and Frank McNulty were quite statesman like at the microphone

        I don’t know Bob Gardner, but the notion of Frank ever appearing “statesman like” is just a little too hard for me to imagine.

    • pat steadman says:

      I remember a year when the Rule Review Bill was the very last bill passed as midnight approached on the night of sine die.  Rep. Don Lee was angrily pointing at the last remaining lobbyists looking through the glass and accusing them of political brinksmanship because the House was about to back off a controversial amendment.  In fact, the issue had complicated the Rule Review Bill for two consecutive sessions.  Back then the issue that almost overturned hundreds of state rules was facilitating discrimination against gays and lesbians.  This year it was protecting profits for payday lenders.  The cast of characters has changed but the practice of risking the Rule Review Bill for questionable policies is a temptation the House can’t seem to avoid from time to time.

      • Diogenesdemar says:

        Fun guys (or is that fungis?).  Anyway, would it be fair to say that when the Rule Review Bill goes down to the wire that something is probably afoot?

        • pat steadman says:

          The Rule Review Bill ordinarily should be boring, technical and dry.  It is staff-driven by recommendations from the attorneys in the Office of Legislative Legal Services.  Amendments to the bill are usually where controvery arises, although there have been staff recommendations that have also generated big fights.  But any time the bill still lingers in the last week of session there is good indication that something is afoot.

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