Moneytree's giving grew prior to beneficial Senate bill

Payday lender stands to benefit from Senate Bill 5312, which creates a type of high-interest consumer loan

jimmy.lovaas@thenewstribune.comApril 8, 2013 

Seattle-based payday lender Moneytree and its executives funneled nearly $200,000 into state lawmakers’ 2012 campaigns just months before a proposal emerged in the Legislature to create a new type of high-interest consumer loan. The company’s contributions in previous years rarely topped $140,000.

Payday lenders in Washington were hit hard after the state passed payday loan reforms in 2010, with the number of payday loans in the state falling from 3.2 million in 2009 to 856,000 in 2011, according to the state Department of Financial Institutions.

Subsequently, during the 2012 election season, payday lender Moneytree and its executives contributed a total of $193,755 to state lawmakers’ campaigns, with 98 percent of that money going toward Republican candidates, according to Public Disclosure Commission records.

In addition to the state Republican Party, the payday lender also gave to Sen. Barbara Bailey, R-Oak Harbor, who ousted longtime Senate Transportation Chair Mary Margaret Haugen in November’s election. Bailey received $11,200 from Moneytree and its executives.

Another $26,800 of Moneytree’s donations made their way to re-election efforts for Republican Sen. Don Benton of Vancouver. Benton, who doesn’t have any Moneytree branches in his district, won re-election by 74 votes. He also is the ranking member on the Senate’s banking committee, Financial Institutions Housing & Insurance.

Benton said that campaign contributions have no influence on what he supports.

“If someone gives money to my campaign, it’s because they want to support me,” Benton said. “Probably because they know I am pro-business and I’m going to support pro-business legislation.”

Benton and Bailey are among the 23 Republicans who joined with two moderate Democrats to create a new majority coalition in the Senate. The group has a one-vote advantage in the Senate.

Benton is a co-sponsor of Senate Bill 5312, which creates a type of high-interest consumer loan. The bill, which Moneytree lobbyists helped write, would allow lenders to make loans of up to $1,500 with effective interest rates nearing 200 percent and repayment periods stretching from six months to a year. Currently, payday lenders can lend up to $700, and those loans — which can have effective interest rates up to 391 percent — must be repaid with one balloon payment on the borrower’s next payday.

Moneytree also gave $1,800 to Democratic Rep. Steve Kirby, who sponsored a version of the consumer-loan bill in the House, and Rep. Judy Clibborn, who signed onto Kirby’s bill.

One vocal opponent of the bill, Democratic Sen. Sharon Nelson of Maury Island, called the new loans “nothing but payday loans on steroids.” Nelson said the bill is being used to let “predatory lenders like Moneytree” circumvent the 2009 payday loan reforms.

The bill’s prime sponsor is Sen. Steve Hobbs, D-Lake Stevens, who chairs the banking committee.

Hobbs, who has been a vocal opponent of payday lenders in the past, said he was supporting the bill because he thinks it’s a better alternative to payday loans. However, he also said that the bill “needed a lot of work” and was unhappy to see it rushed through the Senate. He also said that Benton had a great deal of input on the bill.

The bill was sent to the Senate floor after La Center Republican Sen. Ann Rivers moved the proposal out of the Senate Rules Committee. The Senate approved the bill, 30-18.

Moneytree executives contributed $7,200 to Rivers’ election campaign.

“I have always believed in the right to participate in politics,” said Moneytree CEO Dennis Bassford. “And that includes contributing money to election campaigns.” Bassford would not comment on how he or other company executives decide which candidates they give to.

Neither Moneytree nor its executives violated campaign-contribution laws, as all of their individual contributions were within established limits. Individuals are allowed to give up to $1,800 to a legislative candidate’s election campaigns; $900 each for the primary election and the general election.

Jimmy Lovaas: 360-943-7123 jimmy.lovaas@thenewstribune.com @jimmylovaas

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