The Ohio Coalition for Responsible Lending lost one of its members this week as Rent-a-Center, a company that charges outrageous rental rates on furniture and owned a payday loan company told America's Second Harvest and its Ohio affiliates that Rent-A-Center would not honor its half-million dollar pledge to them unless Second Harvest withdrew from the coalition.
The Second Harvest affiliate withdrew, not wanting to endanger the promised donation, even though they had originally joined because companies like Rent-a-Center that take advantage of the poor are part of the reason that the poor need to go to food pantries.
There was a Wall Street Journal article about this today. The poor companies can't make it charging 28% as proposed in an Ohio bill:
Wednesday, the Ohio House passed a bill that would cap the annualized interest rate on payday loans at 28% and limit borrowers to four loans of $500 each a year. Ohio's governor said last week that he supports a cap.
Rent-A-Center currently charges interest rates on one-week payday loans that are equivalent to an annual rate of as much as 782%, according to a company Web site. In Ohio, the average borrower pays $15 for each $100 borrowed, and the typical loan is repaid in 19 days, a 288.16% annual rate, the company says.
Rent-a-Center whined also that they might have to leave the state if this bill becomes law:
Rent-A-Center executives said the rate cap proposed in Ohio would force the company to shut down its Cash AdvantEdge operations in the state, home to 53 of the company's 276 financial-services locations nationwide. Such a bill "will end the payday-lending industry in Ohio, like a similar rate cap did in Oregon last year," Dwight Dumler, Rent-A-Center's assistant general counsel, wrote in answers to questions about the company's Ohio lobbying campaign.
48 states to go?
Too bad for these companies. I wouldn't mind if every single person making money on this sleazy business suffered terrible misfortune and became victims of their own businsess. They almost make health insurers look like paragons of virtue.
If you are in Ohio or another state that has a legislature that is willing to stand up to this sort of legalized thievery, give your legislator some encouragement.
Blackmail
There is another, more serious problem here, too. That is the pressure that corporations put on not-for-profits to shut up or do their bidding. Not-for-profits have been forced to do more with less as the Compassionless Conservatives have gutted government programs and diverted other funding to religious organizations. Finding funding becomes more of a problem and money from corporations is welcome. America's Second Harvest has been very successful in working with corporations, particularly in the food industry, to get donations, both of money and in-kind.
The blatant power play of Rent-a-Center shows the danger that these organizations expose themselves to as they become more dependent on corporate contributions. Rarely is a corporation so tin-eared as Rent-a-Center, but they don't often have their gravy train directly threatened, either. Most corporate discussions are more subtle. Yes, we've been helping you and we want to continue to help you, but X is making it very difficult because Y, sort of thing. We need to make certain that our government does its job so we don't have not-for-profits doing the job of the government and relying on corporate largess to do it. Raising corporate taxes could be a good way to help fund some of these needs and, with corporate citizens like Rent-a-Center, I won't feel sorry for them one bit.