Sunday, December 28, 2014

Last minute insert to spending bill would clear way for payday lending's return

The state Senate is stuck between a rock and a quick cash lending store.

Last minute insert to spending bill would clear way for payday lending's return

Story has been updated to clarify that Pebble Beach fundraiser was not for Sen. Jake Corman, however he was in attendance.

The state Senate is stuck between a rock and a quick cash lending store.

In its final action before summer break, the Senate is to meet today to consider a series of bills that authorize the state to spend most of the $28.4 billion budget signed into law by Gov. Corbett on Sunday night

High drama was expected over the welfare code into which the Senate had placed controversial Medicaid expansion that was summarily stripped out by the House.

But by this evening a new issue erupted over a tiny provision - just six lines on page 55 of a 57-page bill - slipped into the fiscal code bill, which contains a piece of the Philadelphia school rescue plan.

Now the question before the Senate is, will the chamber concur on two bills it majority does not find palatable to keep government functioning, or reject them and risk fiscal chaos?

The House it turns out had inserted a one-paragraph provision deep in the bill to force the Senate to approve payday lending in the Commonwealth.

Payday lenders were run out of the state in 2010 by a Supreme Court ruling capping interest rates at a level that made it no longer profitable to operate here.

A stand alone bill to attract payday lenders back to Pennsylvania, sponsored by Sen. Pat Browne (R., Lehigh), passed the Senate Finance Committee last month, but was not expected to get a floor vote this spring

The pay day lending indusry hired some of the most closely-connected lobbyists in Harrisburg to get approval to bring back stores.

Among them are Andrew Marsico and John O'Connell ,who organized a golf outing to Pebble Beach fundraiser in February for House Speaker Sam Smith (R., Jefferson), attended by Senate Appropriations Chairman Jake Corman (R., Centre) and other lawmakers in the middle of the budget hearings.

O'Connell, once a top aide to Gov. Ridge and House Speaker John Perzel, spent 18 months in federal prison for mail fraud for embezzling funds to pay gambling debts.

He represents Axcess Financial, operator of Check 'n Go payday loans. Marsico represents Cash America International, which advertises itself as the largest operator of "pawn loans" in the U.S.

Advocates for the poor, who have been fighting to stop legislation that would bring payday lenders back to Pennsylvania, said the move is a pure example of special interest money controlling the legislature.

Steve Drachler, executive director of United Methodist Advocacy, said when persuasion didn't work, lobbyists used their political power to subvert the system.

"They have now turned to the an old trick - sneaking language into a bill and hoping no one will notice," said Drachler, who served as spokesman for House Speaker John Perzel. "It's just one more example of how big money affects access to the legislative process. While it may not be illegal, it's morally despicable."

Eric Epstein, founder of the government watchdog group Rock the Capital called the move "devious and dangerous."

 "It's an abomination," said Epstein. "It exposes vulnerable citizens to predators and deprives them of health care."

 

 

 

 

 

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About this blog

Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis and Amy Worden in the Inquirer's Harrisburg bureau, based right in the statehouse, and by the newspaper's far-flung campaign reporters.



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