Fox calls payday loans "a valid tool" for people with nowhere else to go
House Speaker Gordon Fox is defending high-interest payday loans as a useful tool for borrowers who might otherwise face even worse alternatives.
Fox discussed his stance as part of an interview broadcast Thursday morning on RIPRPayday lenders can charge an annual 260 percentage rate in Rhode Island. Lawmakers plan to try to tackle the issue this year after previous efforts have gone nowhere. State Treasurer Gina Raimondo has pledged to play a bigger advocacy role on the issue this time around.
During our interview, I asked Fox whether he supports efforts to reduce the 260 annual percentage rate that can be charged on payday loans. The speaker responded by citing how Senator Josh Miller "tried to work on a lot of compromises last year that were unacceptable to both sides."
Fox went on:
"I don't like people being ripped off. I don't like predatory lending practices, but I also understand for folks that have nowhere else to go, it might be a valid tool for them to go to and not be driven to more onerous kinds of lending, including Internet lending, at higher interest rates, if you could imagine such a thing, or backroom lending, which is even worse.
"So I'm committed to -- I want to make sure that any practices we have are fair to people, that offer them the opportunity to have the financial means offered to them when they need it, but fairly."
Fox inherited the speakership in 2010 from William Murphy, now a lobbyist for payday lending giant Advance America.
During a WPRI debate last year with legislative opponent Mark Binder, Fox said the former speaker doesn't influence his decisions on payday lending or other subjects. "I don't care who they hired as their lobbyist," Fox said. (The discussion of the issue begins at about 19:20 in the videotape; h/t Ted Nesi.)