New York’s Attorney General Front Runner Accepts Payday Lending Campaign Donation
Inside Subprime: Oct 8, 2018
By Aubrey Sitler
Letitia James, a public advocate campaigning for attorney general for New York, was given a $10,000 donation by company on September 6. The company, which belongs to the Oklahoma-based Otoe-Missouria Tribe, owns several payday loan companies that have clashed with state regulators in the past. James’ campaign stated at the time that the donation was returned, but no specific information was provided that revealed exactly when the donation was returned.
The Otoe-Missouria Tribe’s Consumer Finance Services Regulatory Commission faced a legal battle in 2013 when the tribe’s payday lending companies were accused of charging annual percentage rates of up to 448.76% percent, an extreme jump from the state’s legal limit. New York’s usury laws allow lenders to charge up to 16% before being subject to civil penalties. Interest rates that exceed 25% risk criminal prosecution. Payday lenders have been accused by critics of trapping borrowers in unrelenting cycles of debt due to extremely high interest rates that require customers to continue to borrow more and more payday loans due to the inability to pay the loan and interest accrued off in full. The Otoe-Missouria tribe sued the Department of Financial Services claiming the department had crossed a line and abused its authority by attempting to regulate the tribe’s business activity. The tribe lost both the suit and the subsequent appeal that followed. The company’s website now states that the company no longer provides payday loans in the state of New York.
James’ made history in September as she became the first black woman to ever win a major party statewide nomination. If James were to win in November, she would become the first black woman to assume statewide office. James successfully defeated three of her rivals in the Democratic primary on September 13, all of which were poised to make history as well with one candidate to have been the first openly gay holder of statewide office while the other two would have been the first two women to be elected to the attorney general position. In her victory speech James attacking President Trump, whose administration has also been seen as working with payday lenders, saying that her victory was not “about the people, but mostly it was about that man in the White House who can’t go a day without threatening our fundamental rights.”
After the victory, her campaign disclosed to the state Board of Elections that, while two small but unrelated donations were returned, the $10,000 donation from the company the tribe used to donate the gift, was never returned. James’ team is now claiming that the campaign merely misspoke when they claimed the donation was returned, and that the donation would be returned by Friday, September 14. As of early October the donation was still not returned.
For information on predatory payday loans in Oklahoma, check out our Subprime Reports for: