Predatory Payday Lenders Compare Themselves To MLK And Civil Rights Marchers In Fight Against Regulations

Payday lending companies are combining their money in order to form a corporate front group to fight for the right to charge interest rates of 445 percent and more in the state of Missouri.

Payday loan interest rates in the Show Me State average nearly 60 percentage points higher than the rest of the nation, 445 percent to 391 percent. Fed up with the disastrous effect that such predatory lending is having on poorer Missourians, a group of citizens, religious groups and civic organizations are gathering signatures for a proposed November ballot initiative that would restrict payday lending interest rates in the state to 36 percent.

Payday lending companies, ruffled by the prospect of being able to charge a mere 36 percent interest rate, have teamed up to fight the initiative. Two weeks ago, a new group – Stand Up Missouri – emerged, purporting to represent “consumers, businesses, civic groups, and faith-based organizations.” However, a look at their finance records reveals that the group is funded – to the tune of $216,000 – by just seven payday lending corporations, including Tower Loan, Western Shamrock Corporation, and Brundage Management Company. The front group’s CEO and chairman, Tom Hudgins, is the vice president of Western Shamrock Corporation.

In its first two weeks of existence, Stand Up Missouri has already taken an Orwellian approach to the term “payday lending” – they prefer the phrase “traditional installment loan” – and invoked the Civil Rights Era to defend why payday lenders ought to be allowed to gouge consumers. An ad on their homepage currently explains to viewers how payday lenders are just like Dr. King and Civil Rights Era marchers:

AD: You had poor people who followed Dr. King and walked with him hundreds of miles because they believed in civil rights that much. In this day and time, when can we say we’ve seen something like that where people are willing to leave their job to support something that they believe in? We have that statement, “actions speak louder than words,” and that’s why I’m here. That’s why it was important for me to take time off to be here because I believe wholeheartedly in the company that believes in me.”

Stand Up Missouri joins another pro-payday lending group in the state called Missourians for Equal Credit Opportunity, which has used a loophole in campaign finance law to hide whoever or whatever corporation(s) gave $600,000 to combat the initiative.

It’s not difficult to see why payday lenders are fighting the consumer effort so vociferously. The St. Louis Post-Dispatch details just how ubiquitous payday lending has become in Missouri: “In 2010, there were about 1,040 payday loan stores in Missouri, according to the Missouri Division of Finance. Missouri is second only to Tennessee among its neighbors in the number of licensed payday lenders. Some 2.43 million payday loans were made in Missouri in 2010.”

The proposed 36 percent interest rate cap is also not without precedent. Until the mid-1990s, Missouri law restricted lenders to a 28 percent ceiling.


Felix Salmon argues that Stand Up Missouri represents Consumer Installment Lenders rather than traditional payday lenders. The former doles out loans above $500, the latter below.

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