Spurred by the rush to pass Colorado House Bill 15-1390 at the end of the 2015 legislative session, Colorado Ethics Watch has investigated lobbying spending and campaign contributions by predatory lenders and their affiliated political entities, producing its newest report Shark Attack: Predatory Lender Influence in Colorado Politics.
With one week remaining in the 2015 legislative session, House Bill 15-1390 was introduced on a fast track that would have tripled the loan amount on which predatory lenders could charge an astonishing 36% interest rate. The legislation sailed through the House with little debate, narrowly passed the Senate, and ultimately was vetoed by Governor John Hickenlooper.
“The bill’s rush through the legislature in the waning days of the session indicate that lobbyists and legislators understood the bill would not be popular if it was subjected to a full hearing on a regular schedule,” said Luis Toro, director of Colorado Ethics Watch.
Colorado laws are currently designed to protect consumers from so-called “predatory lenders,” lenders who charge above-market interest on small loans, often for very short time periods. These loans have been shown to trap consumers in a cycle of debt, under fees, credit insurance charges and high interest, leading people to continue taking out loans of ever-increasing size with unfavorable terms.
The report finds that while political contribution amounts were not large due to Colorado’s strict campaign contribution limits, they were widely distributed among members. More than two-thirds of the legislature, including 37 Democrats and 31 Republicans, received contributions from people associated with predatory lenders or their PACs. The report also found over $300,000 in lobbying spending by subprime and payday lenders since 2012.
Click the link below to read the full report.