Sioux Falls/Las Vegas loan shark Chuck Brennan stayed mostly quiet during fight between rate-capping reformers and payday lenders on this year’s South Dakota ballot. The day after voters approved capping short-term loan rates at 36% and rejected the payday lenders’ effort to trick us into writing unlimited interest rates into our constitution, Brennan said he wanted to leave the regulation of his industry up to the voters:
Brennan said he stayed out of the campaign because he preferred to leave it up to voters.
“They spoke loud and clear and they don’t want payday lending in South Dakota,” he said [Jodi Schwan, “Chuck Brennan on Payday Lending Measure: We Are Not Closing,” that Sioux Falls paper, 2016.11.09].
That, like much of what payday lenders tell you, was horsehockey. Brennan is now turning away customers seeking loans and handing them a letter telling them to urge legislators to overturn the 36% rate cap. Brennan has also posted a notice on his Dollar Loan Center website trying to stir up resistance to Initiated Measure 21:
MEASURE 21 HAS CRIPPLED South Dakota’s ACCESS TO CREDIT
Over 100,000 Hard Working South Dakotans Deserted by Lawmakers
No one would like to lend you money today more than all of us here at Dollar Loan Center. That is what we do and we have been doing it for over 15 years in South Dakota. We take tremendous pride in the way we do business and it has been an honor and a privilege helping you and your family with your financial needs.
On November 8th, 2016, the passing of the South Dakota Payday Lending Initiative 21 caps all interest rates at 36% APR. Unfortunately Dollar Loan Center or anyone in our industry cannot offer a product at that interest rate. To put things in easy terms, we normally charge around $20 for someone to borrow $300 for a week. This new law would limit us to charging $2.00 for that same loan. No short-term lender in the state of South Dakota will be able to help you with these restrictions.
We want to continue working with you and helping you and your family. It is not right that the government can control who you choose to do business with. The only way to fix this travesty is to voice your opinion. Tell your story of how Dollar Loan Center has helped you and what will happen if we’re not around anymore.
Our offices will remain open to service all of our existing customers and loans that were processed prior to today. You can rest assured we will be here to lend you money if we can get this measure overturned [Chuck Brennan, Dollar Loan Center website post, retrieved 2016.11.16].
Brennan’s cry is bogus on multiple points:
- The 36% rate cap has not crippled South Dakota’s access to credit. My household still has its mortgage, car loan, and several credit cards. I don’t have hard numbers, but I would speculate that 99% of the dollar value of credit that South Dakotans want is still available to them from reputable lenders.
- IM 21 does not cap all interest rates at 36% APR, just those from predatory short-term lenders like Brennan.
- Under this rate cap, government does not control who you choose to do business with. If Dollar Loan Center remains open, you can choose to do business with them or not. This rate cap controls what kind of business Dollar Loan Center can lure you in to do. And, as with the sale of drugs, alcohol, lottery tickets, and other products that cause social harms, it is perfectly right for government to control how short-term lenders conduct their business.
- A vote by the people is not a travesty. If it were, it would be at least ironic to call for people to fix it by voicing their opinion.
Interestingly, Brennan’s call to action doesn’t target any sitting legislators. Instead, Brennan directs citizens to call the state Division of Banking, Governor Dennis Daugaard, Daugaard chief of staff Tony Venhuizen, KELO TV, and that Sioux Falls paper. Pressuring Governor Daugaard seems misdirected: the Governor came out in the last days of the campaign in favor of IM 21. The Governor gave a soft Yes, signaling he was open to a legislative amendment in case of “unforeseen circumstances” but also saying he didn’t have strong feelings either way about the issue. The Governor seems unlikely to invest energy in leading an effort to overturn the will of the voters (especially when he’s busy cobbling together a state budget amidst sluggish revenues and the canning of state budget expert Jason Dilges).
Brennan also tells the customers he’s rejecting to go bug victorious IM 21 sponsors Steve Hickey and Steve Hildebrand:
Below are the people who started this Initiative and pushed for its passing. They are directly responsible for us not being able to help with your financial needs and put this measure on the ballot. They feel they know better than you and want to control your choice as a consumer.
Disgraced Former SD Legislator
With that “disgraced”, Brennan arguably libels Hickey: he includes the word with intent to harm Hickey’s reputation, and as Greg Belfrage notes, the insult is supported by no credible evidence. Brennan labels Hildebrand with similar degrading intent, as if “political activist” (a) fully describes Hildebrand and (b) is a negative. Hildebrand used to make a living as a campaign consultant (and a darned good one, getting a black guy with the middle name Hussein elected President of the United States), but he is now a Sioux Falls businessman who took time to advocate for a particular public policy… which one could say is the same thing that Brennan is doing with this attack right now. If Hildebrand is a political activist, well, now, so is Chuck Brennan.
But political activist Brennan is taking a far sleazier and less effective approach than political activist Hildebrand. Political activist Brennan is pressuring his customers to do his lobbying for him. Steve Hildebrand never said to his customers at Josiah’s, “Sign the rate cap petition, or you get no coffee!” Hildebrand never pushed his customers to lobby Brennan to change the law (and he certainly never sent goons over to sit in and harass Brennan at his workplace). And Hildebrand never told his customers to waste their breath lobbying Chuck Brennan or any other payday lender to change the law. Telling payday loan customers to call Hickey and Hildebrand now is completely to changing the law: Hickey and Hildebrand aren’t going to call for the repeal of their successful initiative any more than Brennan would ever have changed his mind and called for passage of the 36% rate cap. Telling borrowers to call Hickey and Hildebrand is not constructive political activism; it is pure harassment.
Jodi Schwan let Brennan call himself a “political junkie” in her interview with him last week. If Brennan were an effective political junkie, he’d have mobilized earlier and stopped IM 21 from passing in the first place. His late, misdirected, bullying activism shows he’s far more junky than political.