JEFFERSON CITY, Mo. — Gov. Jay Nixon used his veto power again today, rejecting a measure that he says would have allowed the payday loan industry to avoid meaningful reform.
Democrats have long criticized attempts at so-called “payday loan reform” in recent legislative years as a thinly veiled attempt to eliminate regulations on behalf of the lending industry. Nixon said the bill “provides false hope of true payday lending reform” in his veto message.
“Supporters point to the lower cap on interest this bill would impose, but allowing payday lenders to charge 912.5 percent for a 14-day loan is not true reform,” Nixon wrote in his message.
Nixon and other opponents of the Senate Bill 694 have long accused the payday loan industry of buying influence among Missouri lawmakers. Between 2000 and 2010, the industry donated well over $1 million to Missouri’s legislature. Lobbying firms and lobbyists acting on behalf of the industry have given more than $600,000 in addition, according to a study by the non-partisan and non-profit Public Campaign.
The bill is not without supporters. Rep. Tony Dugger, R-Hartville, carried the bill in the House and is the Chairman of the Financial Institutions committee. Dugger said that lenders in the industry simply had to charge high rates at times in order to turn a profit.
“You can’t loan money that’s unsecured, and we’re talking about small amounts of money usually, you can’t loan it for nothing,” Dugger said. “I don’t believe it reaches the kind of rate [Nixon] says it does. The lender really has no recourse for going after these loans.”
Dugger said the bill had the first reform measures for the industry in years, and that he was “shocked” that Nixon didn’t see it that way.
Organizations like Communities Creating Opportunity, a non-profit social justice and community organizing group based in Kansas City, applauded Nixon’s veto. CCO vocally opposed SB 694 during the legislative session.
“We lament the fact that too many politicians have been taken in by the more than $1 million the payday loan industry has spent on lobbying and campaign cash,” said Andrew King, CCO spokesperson, in a statement. “We are disappointed that earlier this year in a public hearing lawmakers attacked a pastor who warned against this bill, all under the watchful eye of a lobbyist for predatory lenders. But we are hopeful and resolute that this veto marks the start of reforms Missourians desperately need and truly deserve.”
Dugger said that he would defer to Senate sponsor, Sen. Mike Cunningham, on a potential veto override in September. Cunningham did not immediately respond to requests for a comment.
Collin Reischman was the Managing Editor for The Missouri Times, and a graduate of Webster University with a Bachelor of Arts in Journalism.
