Auto Title Loan Company Donated to Politicians
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UPDATED: Nov 13, 2012
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LoanMax, an auto title loan company based in Georgia, has contributed $24,000 to over a dozen Republican Assembly candidates in the state of Wisconsin this year, according to Journal Sentinel.
In Wisconsin, donations to Assembly candidates are capped at $500 per person. Over three-quarters of this year’s campaign contributions came in the final weeks before the November 6 election.
All forms of auto title loans were prohibited in Wisconsin under the argument that they were forms of predatory lending. Democratic politicians argued that auto title loan companies prey upon low-income borrowers who lose their cars in the event of default.
Assembly Republicans succeeded in lifting the ban on car title financing in 2011.
State Senator Bob Jauch believes that LoanMax corporate leadership have donated to their Wisconsin Republican allies in gratitude for lifting the ban.
“These people have the conscience of a pit viper. There is no moral basis for these contributions,” said Jauch in an interview with the Journal Sentinel.
Republicans were quick to defend the business model of car title lending as well as the industry’s customer base.
“There are people all across the state whose biggest asset is a car. If they want to go borrow money for a short-term loan because they need to fix the car or they have a roof repair or a medical bill, I think they should be able to use a car as collateral,” said Vos, a Representative Robin Vos, a Republican candidate and co-chairman of the Joint Finance panel.
Since 2006, LoanMax officials have contributed over $50,000 to state lawmakers. Almost all of them have been Republicans.
“These financial predators are trying to buy themselves a bunch of weak-kneed elected officials so they can undo existing consumer protections and further prey on Wisconsin consumers,” said Scot Ross, leader of an anti-Republican organization.
Rep. Vos feels that it is clear the auto title loan companies made a strategic decision out of self-preservation.
“It’s fair to say that if Democrats had been in control, might they have done things that hurt their (title loan) business? Probably. It makes sense to buy—you know—to have insurance: Pro-free-market, pro-business Republicans are in office no matter what,” said Vos.