Tuesday, June 19, 2012

Son of NIZ: Payday Loans

This is a story about unintended consequences.Those who support Allentown's Neighborhood Improvement Zone (NIZ) have justified it as an attempt to transform and revitalize Allentown. But in the sausage-making factory known as the Pennsylvania legislature, support for the NIZ might also require support for predatory loan practices against people .

Like dandelions, Cash America offices at one time littered the Lehigh Valley, offering short-term, high-interest payday loans to those who can least afford them. People needing quick cash could borrow money and secure their loan with either a post-dated check or a pre-authorized withdrawal. Annual interest rate? Just 368%. The Pennsylvania Supreme Court put a stop to this practice in 2008, and Cash America cashed out.

Thanks to the Pennsylvania state house, this form of predatory lending is making a return. Legislation that will authorize a 419% APR on a two-week loan passed earlier this month, in a 102-90 vote. It still needs to pass in the state senate.

CACLV's Alan Jennings, as usual, pulls no punches. "Payday lending is usurious and abuses the most vulnerable people," he told me last week. He and numerous other organizations - from AARP to the United Way - note that payday loans are just a stepping stone to delinquency on other bills, bank account closures and bankruptcy.

In the state house, the payday loan legislation was opposed by Democrats Joe Brennan, Bob Freeman and Steve Samuelson, as well as Republicans Marcia Hahn and Joe Emrick. Under incredible pressure by party leadership, Hahn called Jennings from the house floor three times before deciding to vote against the legislation.

But Democrat Jenn Mann supported the bill. Why?

Sounding very Republican, she told The Morning Call's John Micek that government "can't control an individual's finances."

In the Senate, former payday loan opponent Pat Browne is now a payday loan proponent.

Mann and Browne, as you know, are the architects of the NIZ. Informed sources tell me that their support of payday loans is the price they had to pay, in the land of midnight payraises, for the NIZ.

Maybe Cash America can open an office at the arena.

50 comments:

Bill Coker said...

How much did they get for their support?

Bernie O'Hare said...

I think it was horse trading. You vote for my legislation and I'll vote for yours.

Anonymous said...

Bernie, looks like Browne and Mann are getting their ducks in a row to cram the NIZ down the Townships' throats. Don't you think so?

Bernie O'Hare said...

They are trying their best. I am told that the Guv' will not sign legislation unless there is ""local skin" in the game. In other words, the state has no intention of financing these improvements solely with its own taxes. So they will try their best to ram this down the throats of local communities who never authorized the use of their tax money and who never even knew about it.

Anonymous said...

Bernie any updates on whether Browne is planning to amend the NIZ law?

Anonymous said...

I will look and see if I can find one on my way to the hockey game. I so look forward to getting to my seat next year and enjoying Phantoms hockey in Allentown.

Bernie O'Hare said...

Just what I've already written. He did not respond to my inquiries.

Anonymous said...

BOH does the guv know that Reilly and his cronies are planning to hijack cigarette taxes/fuel taxes to finance their Bldgs?

Union Goon said...

Wow, this is a stretch to turn this into a NIZ issue. It doesn't matter if it is approved, because the people still have to make the decision to go there and get a loan.

Unless they are backing legislation that forces people to take these loans, I don't think the issues are related.

Bernie O'Hare said...

Union Goon, It is no stretch. It is exactly what has happened. Senator Browne has confirmed this with some people (not me). In exchange for support for the NIZ, he had to agree to support payday loans, something that unions are supposed to oppose.

Bernie O'Hare said...

"BOH does the guv know that Reilly and his cronies are planning to hijack cigarette taxes/fuel taxes to finance their Bldgs?"

From what I hear, the Governor is not at all happy with this giveaway.

Anonymous said...

Bernie when is the vote on the NIZ amendment expected to happen?

Bernie O'Hare said...

When they vote on the budget, later this month.

Anonymous said...

Do you think they have the votes?

Bernie O'Hare said...

I don't know.

Anonymous said...

Seems to me they must have the votes. Why else would Reilly be working on the morning call bldg? He knows something we don't!!! Courtesy of his childhood friend Browne.

Anonymous said...

I think they'll have their quarter of a billion dollar arena and I also think the damage to the Pawlowski and Phantom label is significant and lasting.

Hope it was all worth it.

michael molovinsky said...

bernie, i'm not impressed with alan jennings opposing the pay day loans, while sitting on the NIZ board and advocating for the arena. he certainly knew the horse trade. worse, he must know that allentown's low income will not benefit from a hockey arena, quite the contrary.

Mark Baker said...

jennings twists to which ever way the wind is blowing. he has shown his true colors and has rendered himself impotent.

Anonymous said...

High interest loans offer more to the poor than hockey. Kabillionaires get kabillions more dollars while poor folks get their limited options even more limited. These loans can be the difference between eating or not for a few days.

Anonymous said...

Pay Day Loans are back! This will be nice for Hamilton Boulevard and other areas with low income people near by. A few pawn shops and there you have it.

Anonymous said...

Sometimes can't tell when your exaggerating or not. 419%?
Surprised Mann joined Browne in support of payday loans. Bet your right: there's gonna be a store in the arena.

Anonymous said...

It's good for them.

Kevin C. said...

When you ban payday loans you will also get unintended consequences. People take out these loans because they are desperate. Without payday loans they will turn to illegal methods to get the money. Going to a loan shark, theft, or turning to prostitution are some options, all worse that getting a payday loan.

Anonymous said...

Oh please! Kevin, there are legal, ethical programs at our local banks to access emergency funds. No need to go to loan sharks, theft or prostitution. Come back to Bangor and ask before you comment from your Republican perch in Florida.

Anonymous said...

Wow.

Wonder how Alan Jennings feels right about now, after selling his soul to this band of thieves?

The Banker

Anonymous said...

Alan Jennings sold his soul to the SANDS some time ago.

Anonymous said...

I don't remember that - what'd he do over there?

Anonymous said...

Kevin C --- payday loans are loan sharks. They suck the blood of the poor.
You don't know this? Or do you support brutal interest rates and exploitation of the neediest amoung us?
I might ask Democrate and Union supporter Jen Mann the same questions.
I wonder if Jennings has had this conversation with Mann?

Anonymous said...

Casino gambling contradicts everything Jennings claims to believe in about community development, sustainable job creation, and strong working class and middle class neighborhoods.
Jennings has always been more about hangin' with suits and bankers than the working poor he claims to represent.

PS He plays porker with Mayor Ed regularly. They are buds.
He also loves to pal around with the money guys behind all this stuff.
He most likely sleeps like a baby at night, certain of his own rightesness.

Bernie O'Hare said...

"PS He plays porker with Mayor Ed regularly."

I have been highly critical of Jennings' involvement with ANIZDA as well as his strident advocacy of the NIZ. But there is nothing wrong with him playing poker with the Mayor. He had me over to his house for a game, too. Also, I believe Jennings has remained true to his principles on the issue of payday loans. Browne and Mann have not. To get their damn arena they had to agree to legislation that will hurt people throughout the state.

Bernie O'Hare said...

"Casino gambling contradicts everything Jennings claims to believe in about community development, sustainable job creation, and strong working class and middle class neighborhoods."

That is certainly true in AC. In Bethlehem, the Sands seems to have been a good fit, primarily bc of the careful planning that appears to have gone into it. Instead of being gaudy, it is so understated that people drive right by without knowing it is there. The host fees have righted Bethlehem's finances. and have enabled a small boro like Freemansburg to build a police department.

I am no casino advocate and don't even gamble. But it strikes me as a good thing.

As for Alan, I do not think he had much of anything to do with it. I know he supported it, but not in a big way.

I do believe his advocacy for the NIZ, which includes membership n the NIZ board, goes too far, is too strident, and is actually counterproductive to his role at CACLV.

But I do not question Alan's principles, not for a second. He has been very consistent in is opposition to payday loans and has remained so. I do think that issues like this should make him wonder whether he should participate in a NIZ Board filled by people like Mann and Browne.

I do question those tow. They appear to have engaged in horse trading.

Bernie O'Hare said...

"Sometimes can't tell when your exaggerating or not. 419%?"

That's according to Philadelphia Community Legal Services. I linked to it in my post. I was not exaggerating, but reporting what I've read.

Bernie O'Hare said...

" These loans can be the difference between eating or not for a few days."

Baloney. There are food stamps, food banks, churches, etc. If a person uses a payday loan to buy food, what happens when they loan comes due and he has no money for food in the following week bc he paid a triple digit interest? This is no service to the poor.

There are responsible loan programs, made ethically, by some community banks.

Anonymous said...

Bernie, you played cards at the Mayors house? What did you play, texas hold'em?

Anonymous said...

Payday loans are part of the whole inner city "cancer" milleu. Best to cut it out.

Anonymous said...

To all pa. resident,

I want to Thank you for the free health care, Tax free income and SSI benefits that I receive.
Also Free rent and food stamps.

Julio

Mark Baker said...

the casino has not "righted Bethlehem's finances". check the multi million deficits of the past years

Bernie O'Hare said...

Mark, That tide turned last year. Bethlehem is now in the black.

Bernie O'Hare said...

7:52, What does your ethnic slur have to do with anything?

Bernie O'Hare said...

1:37, I did NOT play cards at Hizzoner's home. I am relatively certain I'd be unwlecome. I played cards at Alan Jennings' home, and i think I won $7.

Anonymous said...

Mark you are right about the Casino. Bethlehem has really screwed the pooch on its finances under Casino Johnny Callahan. However, now that Bernie is part of team Callahan for county executive, he will be praising the "Bethlehem" miracle. Of course those of us living here know the only thing he has been involved in is a thug skatepark, a closed fire station and a looming financial blackhole for the city.

Go Johnny!! Please, just go.

Bernie O'Hare said...

When Bethlehem was engaged n robbing Peter to pay Paul, I was one of its most vocal critics. Now that practice has stopped, and the City finished 2010 with a cash balance. It has turned the corner. I believe in being honest. If an elected official does something poorly, i say so. If he does something right, I say so. It's called being fair.

Anonymous said...

You support a three-card monty politician who covers up family member's destroying police cars. Stop with the open government stuff. This is reminiscent of your cheerleading for John Edwards. You're either starved for attention by decision makers, or a terrible judge of character.

Bernie O'Hare said...

I do not say I support him. What I say is that it is important to be fair, and in fairness, he has turned the City around. Don't forget that I am the person who broke the story about his brother-in-law.

Anonymous said...

Casino Johnny helped the city do a complete 360 degree turnaround. Word on the street is someone you know in the Johnny camp got to you and the bait was Gracedale.

You really have changed your tune from a year ago Bernie.

Bernie O'Hare said...

You are insane. Callahan supported Gracedale and signed the petition to keep it. I think your real objection to Callahan and Panto is that they are both willing to speak to a citizen. And that they are not Heckman.

Anonymous said...

Wow, more hate on Heckman. You really have a problem with the guy. Is that the new Callahan line you must push?

Bernie O'Hare said...

I like Heckman, but I notice that he is the only one not being trashed by trolls like you.

Cousin Jimmy said...

Why would unions be opposed to payday loans? It seems like that would be a "who cares?" issue to them.

Payday loans are here anyway. They are just done over the internet from out of state. Might as well keep the money here.