Payday lenders take from the poor — and give to Tennessee candidates and lawmakers 

Robin Hood in Reverse

Robin Hood in Reverse

Spend any time driving around Nashville, and you'll notice payday lending shops sprouting like weeds along the city's major pikes. Across the nation, the Center for Responsible Lending says, there are two payday lending storefronts for every Starbucks.

But the soil is especially fertile here. While a number of states have banned payday lending — which has earned a reputation for exploiting the poor with sky-high interest loans — The Tennessean reported in April 2013 that Tennessee has welcomed it with lax regulation. A 2006 study from California State University Northridge showed nearly five times more payday lenders in Tennessee than McDonald's locations.  

Correlation doesn't necessarily equal causation. But by a strange coincidence, the industry's tendrils have found purchase within Tennessee state and local politics for many years. And this election cycle is no different.

A scan of state financial disclosures reveals at least $66,750 in political donations from the payday lending industry so far this year, either given directly to candidates or funneled through political action committees. The biggest player is Advance PAC, the political-money arm of Advance Financial, which was founded in Franklin and boasts 56 locations in Tennessee. Advance PAC spent $31,000 in the month of June, handing out contributions of $1,000 or more to 14 legislators.

The contributions skew Republican, but they're not exclusively partisan. They include $1,000 checks to House Majority Leader Gerald McCormick and GOP Caucus Chairman Glen Casada, as well as Nashville Democrats Gary Odom and Jason Powell. The PAC also gave $1,000 each to the Senate Democratic Caucus and the Tennessee Legislative Campaign Committee, and a $10,000 contribution to RAAMPAC, the Republican committee founded by Lt. Gov. Ron Ramsey.

State records show Advance America has given out only one check directly to a candidate this year: a $1,000 contribution to Republican state Sen. Steve Dickerson. But that doesn't mean the company's not spending on state politics. In June, it contributed $25,000 to Tennessee First PAC, a committee started by lobbyists David McMahan and Beth Winstead, whose firm is among the largest and most influential in the state. Tennessee First gave more than $100,000 to candidates in 2012 and 2013. A significant portion of those funds have come from the payday lending industry, members of which McMahan and Winstead count among their long list of clients. They've given out just $8,000 in 2014, according to state financial disclosures.

Another player is Cash America, which spends on politics at all levels of government across the country. It gave out nearly $10,000 to Tennessee candidates in June, including contributions to Nashville legislators like Dickerson, House Speaker Beth Harwell, and Sen. Thelma Harper. One of their checks came back to them — returned by Senate District 21 Democratic candidate Jeff Yarbro, who told the Scene he didn't feel comfortable accepting the contribution "because our priorities are in a really different place." Yarbro did receive $500 from Tennessee First, however, as did Harwell's PAC, Rep. Vance Dennis and several candidates for local offices around the state.  


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