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Payday loan bill passes House with 17 percent per month interest rate

John Marshall / Red Dirt Report
Side by side payday loan companies in El Reno, Oklahoma. Business should be booming if Oklahoma Small Loan Act passes through legislature.
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One legislator referenced themselves as enslavers of poor

EL RENO, Okla. – Last week Rep. Chris Kannady (R-Oklahoma City) submitted the Oklahoma Small Loan Act, creating a new payday loan of 17 percent per month for Oklahomans, and it passed.

Highlighting some of the benefits, Kannady made claims that House Bill 1913 would take care of the most vulnerable; push the federal government out of the way so we can do the right thing; cut interest rates cut in half; and provide protection for families in need.

“These people have no other alternatives, well, I take that back they do,” Kannady said. “They can sell drugs, they can get into prostitution, and they can get into all other activities, sell off all their assets to take care of their family. Do we want to ignore the situation as it stands or do we want to lead?"

According to Rep. Mickey Dollens (D-Oklahoma City), these loans are just another way to stack our prison system with new inmates whose only crime was to make a payday loan.

He talked about how in a time when we are trying to keep violent offenders out of prison, what is the reasoning behind this.

“What it comes down to, there are other loan options, this kind of flex loan it is the only loan on the books that you can get a felony for not paying on time.”

Rep. Mickey Dollens talks to Red Dirt Report about the lack of financial literacy in Oklahoma.

“In 2015 they collected over $52 million, money coming from our most vulnerable citizens, money that could be going back into our economy,” Dollens said. “There are plenty of alternative options than this type of loan, it is a shame that it passed the House, and I encourage the Senate members to fight it from ever being passed by the Senate and going on to the Governor's desk.”

Kannady and other supporters of HB 1913 repeatedly referred to their new legislation as helping the most vulnerable in our society. Supporters blamed the Consumer Protection Bureau’s new policies. As described in the debate, they would require lenders to verify that applicants have the means pay the loan back.

In support of the bill, Rep. Kevin McDugle (R-Broken Arrow) gave an example referencing the need for HB 1913 because of the Consumer Protection Bureau's regulations.

He blames government control for the 2008 financial collapse, “We screwed it up, the downfall in 2008, it wasn’t because of Wall Street and big banks, the downfall in 2008 was pretty simple, it was because of the government.”

Again McDugle, former Marine Drill Instructor at Parris Island, SC, railed against the Federal Government, “We cannot dictate to anybody what they should do in their business.”

Quieting the House, Rep. Cyndi Munson (D-Oklahoma City) gave dramatic and heartfelt testimony concerning her experiences with the payday lending industry. She is the daughter of a retired 22-year Army veteran who raised both her and her sister as a single parent. Cyndi talked about how heartbreaking the cycle of dependency that payday loans create.

“I cannot sit still and be quiet; shameful, embarrassed, stressed, irresponsible, those are the words used to describe an Army vet who served in the U.S. Army for 22 years and raised two daughters on his own,” Munson said. “Those are the words my dad used to describe himself and his experiences with payday lending products.”

As the story unfolded she silenced everything in an already quiet room, “As the oldest of two it was impossible to ignore the realities that my family faced and the giant elephant in our home.

“It was always finances, mainly the lack thereof and I watched my dad crunch numbers, stretch meals, take on additional jobs and walk in and out of payday lending centers.

“I would hold back my tears and quietly pray that someday God will provide my dad a raise, lower expenses, or get me to an age to start working to help my family with the bills.

“Those memories will never be erased and they make me who I am today and remind me why I must stand and speak up.”

Rep. Collin Walke holding copy of HB 1913 he described as a way to enslave the poor.

During the discussions of the bill, Rep. Collin Walke (D-Oklahoma City) rose to the occasion with stirring insight about how the same bill was proposed last year, Senate Bill 1314. He talked about how the Southern Baptist Convention and the National Association of Evangelicals came out against it.

Walke then talked about the irony of legislators trying to bring the Ten Commandments to the State Capitol, "For 1,000 plus years it was illegal for a Christian to loan another Christian money with interest. It was un-Christian to do it."

Walke blasted back with, "We are called to be defenders of the poor and not enslavers of the poor.

“While we do not have the Ten Commandments at the State Capitol, we do have an opportunity today to live out our Christian faith and say that we will not enslave the poor, we will defend them today by voting no on this bill."

At one point Walke talked about how Oklahoma has the largest per capita of payday loan companies in the country. He then jokingly talked about how lobbyist will tell you how payday loan companies have a 98 percent customer satisfaction rate.

Walke, a lawyer himself, referenced witnessing dockets in the Oklahoma County Courthouse during most weekdays, and how they are loaded with satisfied customers. He said these new loans have the equivalent 204 percent APR as compared to a 30 percent APR for a bank loan over $1,400.

The bill passed 59-31 and moves on to the Senate.

Photos by Red Dirt Report’s John Marshall.

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John Marshall

John Marshall is a videographer and new addition to Red Dirt Report. As he told us: I am...

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Red Dirt Report was launched July 4, 2007 as an independent news website covering all manner of news, culture, entertainment and lifestyle stories that affect and interest Oklahoma readers and readers outside of our state. Our mission is to educate, promote civic engagement and discourse on public policy, government and politics. Our experienced journalists provided balanced in-depth coverage of news stories that affect Oklahomans. Our opinion/editorial stories come from a wide range of political view points. We carry out our mission by reporting, writing, and posting news and information. read more

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