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The Washington State Department of Financial Institutions issued a cease and desist order today to payday lender MoneyTree, Inc., for repeatedly violating provisions of recently passed legislation, that amongst other things, limits customers to eight payday loans with a 12-month period.

From the DFI order:

1.2 Unauthorized Rescission of Small Loans and Exceeding Number of Loans. From about January 1, 2010, to present, Respondent has repeatedly engaged in the following practice: Respondent permits borrowers to obtain one or more small loans from Respondent, then borrowers are permitted to “rescind” the loans several days later, up to and including the due date, for the purpose of obtaining a new larger loan or for extending the terms of the existing loan. The amount of the rescinded loan is then removed from the Veritec system, resulting in the loan not being tallied against the borrower’s statutory limit of eight small loans in any 12-month period.

1.3 Substantial Injury to Public. The effect of the above-described condut is that borrowers are able to obtain more than the statutory maximum eight small loans in any 12-month period, contrary to RCW 31.45.073. Additionally, the conduct results in an unfair advantage for Respondent over those licensees that limit borrowers to eight small loans in any 12-month period.

The investigation was launched after a tip to State Sen. Adam Kline’s office from a MoneyTree customer who described the scheme as a common payday lending practice. After receiving six loans from MoneyTree, the customer service representative advised her of the eight-loan limit, but told her that if she needed more than eight loans, they could roll her previous loans into one, allowing her take out seven additional loans over the 12-month period.

According to emails I have obtained, a subsequent DFI review of database records uncovered 104 accounts at three MoneyTree locations where customers at or near the eight-loan limit had their previous loans “closed administratively prior to new loans being given.” DFI examiners were dispatched to these locations this week, and confirmed the findings.

DFI administrators speculate that MoneyTree might outrageously claim that these loan consolidations are within statutory guidelines, but to this non-lawyer at least, RCW 31.45.073 seems pretty damn clear:

4) A borrower is prohibited from receiving more than eight small loans from all licensees in any twelve-month period. A licensee is prohibited from making a small loan to a borrower if making that small loan would result in a borrower receiving more than eight small loans from all licensees in any twelve-month period.

I suppose it’s conceivable a court might rule that MoneyTree has discovered a legal loophole in the new payday lending statute, but there’s no question that their rescission practice constitutes a blatant violation of the spirit and intent of the law. The whole purpose of this provision was to prevent the borrower from having a small loan spiral into an insurmountable debt at an annualized interest rate of 391%, a purpose that MoneyTree’s actions totally undermines.

The irony is that even these hard won payday lending reforms were a feeble compromise compared to the more sweeping bills the industry successfully fought off. Sen. Kline sought to limit the APR to 36%, the same maximum interest rate that may be charged to military personnel under federal law, while other proposals sought to merely halve or quarter the industry’s usurious rate.

But if this is how the industry responds to what can only be described as a legislative victory, perhaps it’s time to go back to the table and ban payday lending entirely.

There are not a lot of issues on which I disagree with Dan Savage, but this is one of ’em.

“You are right that there is an issue here,” Sandeep Kaushik, spokesperson for the I-1077 (and Stranger alum), writes in an email. “We are working on it now to find a way to make sure, if I-1077 passes, that domestic partners are treated fairly under the law.”

Trust us, says Kaushik, we’ll fix this discriminatory law if it passes, somehow or other. Better to fix it now, before it passes, by refiling.

Yeah, well, I agree that the measure’s reference to “married couples” rather than “domestic partners” potentially ends up being inadvertently discriminatory, and would need to be fixed on passage, but Dan’s insistence that the initiative be refiled is simply impractical.

You can pretty much bet that the Republican Secretary of State and the Republican Attorney General would consume the full time alloted to perform their statutory duties on an income tax measure they surely oppose, and that other opponents of the measure would challenge the ballot title to drag the process out even further. It could be more than a month before petitions for a refiled initiative were back out on the streets, leaving little more than a few weeks to collect 300,000 signatures.

Refile the initiative and you could kill our best chance at progressive tax reform in nearly eighty years.

Besides, it’s not the language of I-1077 that is discriminatory, but rather, the language of our state and federal so-called Defense of Marriage Acts. Fix those, and we have no problem.

So my suggestion to Dan is not to stop pressuring on this issue, but to use his soapbox realistically. Use I-1077 as an opportunity to push for the repeal of our state DOMA, and the passage of legal recognition of same-sex marriage. Or less ambitiously… perhaps Dan could just trust the LGBT community’s allies in the broader progressive community to do the right thing should I-1077 pass, in the same way that we’ve fought hard to do the right thing on LGBT issues over the past half decade.

Yes, Sandeep is asking you to trust us. Well, have we ever given you any indication that you can’t?

You have our backs, and we’ll have yours. But to jeopardize passage of such an important piece of progressive legislation over this one fixable, if symbolic flaw, is to jeopardize the unity of the progressive community as a whole.

After nearly whiffing on health care, Denny Heck now gets a second chance to take a stand on a vital issue in the race for WA-03, this time consumer protections from financial industry abuses. It seems Craig Pridemore isn’t afraid to take a stand for regular people on this issue either. From a Pridemore campaign news release today:

In the second of a series of reform statements, Craig Pridemore, candidate for Washington’s 3rd Congressional seat, endorsed the creation of a Consumer Protection Agency and called on Denny Heck to tell voters where he stands on critical legislation to hold Wall Street accountable.

“Everyday we find out more and more about the predatory lending and outright greed of Wall Street that drove our economy into a ditch,” Pridemore said. “We must enact strict oversight of financial institutions by establishing a Consumer Protection Agency to ensure this crisis never happens again.”

Pridemore’s statement comes on the heels of another he delivered earlier this month about health insurance reform. Just like before, Pridemore is the first candidate in the race for the 3rd district’s open seat to make clear his position on the debate surrounding financial reform in Congress.

“Several weeks ago I asked, “Where is Denny?” Pridemore continued. “We were in the midst of health care reform and it took my opponent hours until the final vote to state his position. Voters deserve to know where their next representative stands on the issues that matter.”

It’s a reasonable guess that the Republicans in the race will babble about the invisible hand of libertardian Randian goodness and such, so the question is whether Heck is with them or not on consumer protections. Behind all the political howling in this country lie real differences on how best to nurture capitalism while ensuring that its destructive tendencies don’t cause mass havoc too often. It will be interesting to see how Heck stands on this reform idea, and if he wiggles around and sticks his finger in the air until the last minute like he did on health care.

There’s a forum tonight in Longview, presenting an excellent opportunity for all the candidates to state their positions on how we curb the financial sector excesses and corruption that screwed up the economy. Yes, the Republicans would like everyone to forget about all that, but as we’re still suffering the lingering effects of Randian idiocy, one could argue this issue is even more fundamentally important than health care.

Reversing a several month downward trend, public approval of Washington’s statewide Dems have recovered somewhat in the latest SurveyUSA monthly tracking polls, with even Gov. Chris Gregoire pulling up a few points from her all-time dismal low of 31% in March.

This holds true for Sen. Patty Murray, who improves to a 46% approval rating, up from her own all-time low of 42% last month. As recently as its January poll, SurveyUSA had Murray at a comfortable 55% approval, pretty much smack dab in the middle of her narrow five-year average.

Much of the speculation over a potential challenge from Dino Rossi stemmed from Republican polls that showed him beating Murray in a head-to-head race, but those appear to have been taken at what now looks like the bottom of a broad, Democratic public opinion trough. Even Republican-leaning Rasmussen now shows Murray once again holding a small hypothetical lead.

The question for Rossi, if he really is seriously considering a run, is what is the blip? Does Murray’s April uptick represent statistical noise, or is the anomaly really the broader, several month decline in Democratic approval that culminated around the time of the health care reform vote?

I’m no polling expert, but a look at the crosstabs suggests the latter, for much of the decline in Murray’s ratings can be attributed to a collapse in support amongst self-identified Democrats and liberals after health care reform appeared to hit an iceberg. A good chunk of these respondents came back to Murray in April, and we can expect that trend to continue as the election grows nearer and voters are faced with an actual choice.

And perhaps that may explain why Rossi appears to be waiting until June to make a decision — so he has more time to figure out whether a trend is really a trend?

You’d think it might make a bigger local headline, but buried somewhere in the business section on the Seattle Times website home page is news that Qwest is being acquired by CenturyTel in a $10.6 billion stock swap combining the nation’s third and fifth largest landline companies respectively. (The New York Times by comparison, currently has the headline front and center on their home page, just below the top story.)

Why is this such big news? Well, first of all, combined with the recent acquisition of Verizon’s local landline business by Frontier, just about all of the landlines in Washington state will have changed corporate hands, along with a large chunk of residential and business broadband connections. The merger will also surely result in numerous layoffs in Washington and throughout Qwest’s mostly Western territory, as the two companies consolidate operations.

Second of all: CenturyTel Field. Get used to it.

The landline business has been shrinking for years as residential customers shed their home phone lines in favor of wireless, and cable companies like Comcast have eaten into what should have been a dominant position in broadband. But Qwest has never made the investment in high-speed broadband infrastructure necessary to keep customers in the fold, and so they’ve paid the price as they’ve watched their market steadily wither.

I’m one of those Qwest CenturyTel customers the merged company risks losing. I’ve never subscribed to cable, so can’t be tempted by a Comcast bundle, and live only a few blocks from a switch, so I receive advertised broadband speeds via distance-sensitive DSL. But Clearwire is installing a tower a block away, promising fast, reliable wireless broadband, so with three broadband providers offering apples to apples service, I’m willing to shop around on price.

When I moved into my house 13 years ago we had three land lines installed (home, business and fax) plus ISDN. Now I have one basic landline — no extra features, no voicemail, no nothing — plus DSL. In fact, the only reason I keep the landline at all is the desire to have reliable 911 service in a house with a child.

The irony is, the residential phone companies like US West Qwest CenturyTel were in the perfect position to dominate broadband at he birth of the Internet age, but refused to make the kind of infrastructure investments that have allowed much of the rest of the world to leapfrog the U.S. in broadband speed. While the average Japanese consumer enjoys speeds in excess of 60 mbps, most of us out here in Microsoftland are still dreaming about joining the French in the 20 mbps range.

And I’m not sure the Qwest/CenturyTel merger signals anything except the intent to continue milking their existing customers for as long as they can, even as we flee to newer, cheaper, and hopefully faster technologies.

93 loyal readers have now contributed $4,437 to our HA Fund Drive, an average of almost $48 per contribution. Thank you for your generosity. Combined with a $2,500 sponsorship pledge from SEIU 775, and we’re more than a quarter of the way toward our $25,000 target.

Two years ago, the last time I ran a fund drive, I set a $6,000 target over one week, and a flurry of last minute contributions took us over the top. This year I’m putting no time limit on the drive, understanding that some of the institutional checks I’ll need to hit the target just can’t be written at a moment’s notice. But so far, individual contributions are lagging behind the previous fund drive in both number and dollar total.

At the risk of repeating myself, a blog like HA, if done right, just can’t be done on a part time basis. Nobody paid me to cover today’s I-1077 press conference, and nobody will pay me for the extensive coverage of the initiative I’ll surely provide between now and November. So if this kind of coverage is important to you, I urge you to please give today and help keep me blogging.

Driving home from this morning’s I-1077 kickoff, I listened to KUOW’s The Conversation, as the Washington Policy Center’s Paul Guppy raised a familiar trope in opposition to a high-earners income tax, arguing that many high-earners will simply pick up and leave:

“People with high incomes are very mobile, so it’s easy for them to change their residence, to move their income or change their tax status in someway, so I don’t think that the supporters would realize as much revenue from this tax as they expect.”

Uh-huh.

A reporter raised this issue to Bill Gates Sr., who brushed it aside by asking “Where do you go?”… the point being that 43 other states already levy an income tax, so it’s not like I-1077 puts Washington at such a competitive disadvantage. “You could go to Alaska, I guess,” Gates continued, but even that level of dismissiveness takes the question too seriously, for the entire critique is predicated on the bizarre notion that we shouldn’t levy a tax on rich people because a handful of them might go out of their way to avoid paying it.

Guppy’s argument also ignores the fact that one of the advantages of being wealthy is that it enables you to consume and enjoy the finer things in life. For example, nobody forces anybody to spend $50,000 on a Lexus when a $10,000 Hyundai can get you from point A to point B just as well; wealthy folks choose to purchase luxury cars because they can afford them, just like they choose to raise their families in Medina or Mercer Island over, say, White Center or Gold Bar.

Likewise, I don’t expect a family earning a million dollars a year to move to South Dakota to save $30,000 in annual taxes. I mean, what would be the point of being rich?

As Gates explains, Washington is “a great place to live.” And it’s the folks who can best afford to live here who are actually least likely to leave.

That’s Bill Gates Sr., the father of the richest man in America, explaining what Initiative 1077 actually proposes, and why he’s taking the lead on instituting a high earners income tax in Washington state.

Class warfare?

A minor adjustment to the layout of today’s Seattle Times front page shows exactly why Initiative 1077’s proposed high earners income tax is going to do a helluva lot better at the polls than the conventionally wise expect, for while the Times chooses to put the tax in bold, above-the-fold type, most voters are at least as concerned with the potential for mass teacher layoffs as they are with protecting the wealthy from higher taxes.

Yes, I-1077 would raise taxes on the top 3 percent of households, but the rest of use would see a tax cut: $160/year for the average King County homeowner. And while yeah, the wealthy are an important part or our economy, I-1077 would actually improve the business climate in our state by exempting 80 percent of businesses from the B&O tax, while reducing B&O taxes on another 10 percent.

But just as importantly, I-1077 would raise an additional $1 billion a year, dedicated to education and health care, two sectors that have endured enormous budget cuts over the past two years.

Nobody likes to raise taxes, but this measure isn’t being run in a vacuum, and given the choice between further underfunding K-12 education and adding a little progressivity into our tax system, I’m guessing an awful lot of voters are going to choose the latter.

It’s the Ask Goldy hour for this episode of the Podcast, wherein folks who have donated at least five bucks to the Horses Ass annual biennial fundraiser have purchased the privilege to ask Goldy anything at all. Goldy bares his soul in addressing the spectrum of questions from his love life to his Torah portion, and a few timely political questions, too. In between questions and answers, the panel delves into the political topics of the week.

Goldy was joined by Peace Tree Farm’s N in Seattle, a surprise visit by FakeTedVanDyk, DailyKos Uber-blogger mcjoan, and me.

The show is 1:00:30, and is available here as an MP3:

[audio:http://www.podcastingliberally.com/podcasts/podcasting_liberally_apr_20_2010.mp3]

[Recorded live at the Seattle chapter of Drinking Liberally. Special thanks to Confab creators Gavin and Richard for hosting the Podcasting Liberally site.]

With a fat donor list left over from his two unsuccessful campaigns for governor, there’s no doubt Dino Rossi could raise a relatively large chunk of money relatively quickly should he choose to jump into the race against Democratic incumbent Sen. Patty Murray. But given Murray’s own fundraising prowess, and her $8.8 $9.8 million head start, it’s hard to see Rossi jumping into the fray without assurances of a substantial financial commitment from the National Republican Senatorial Committee.

Yet given the electoral landscape and the status of their own fundraising efforts, it’s equally hard to see the NRSC being able to live up to the kinda commitment Rossi would require.

Indeed, the NRSC’s current cash-on-hand, about $15 million, actually trails its performance at the same point in both the 2006 and 2008 cycles, when it was sitting on $16.6 million and $17.3 million respectively. In case you forgot, those elections didn’t turn out too well for Republican incumbents and hopefuls, yet if you believe the NRSC’s tough talk, it’ll be spending its resources in even more competitive races than it did in either of those two cycles.

By comparison, the Democratic Senatorial Campaign Committee continues to out-raise its Republican counterpart, and now enjoys $17.3 million cash-on-hand, a $2.3 million advantage.

Back in 2004, Murray ultimately raised over $13 million in her lopsided battle against the politically diminutive George Netthercutt, and with fundraising typically backloaded toward the final months of the campaign, there’s no reason to expect she won’t raise considerably more than that should she face a competitive challenger.

Can Rossi come close to funding parity in only five or six months? No. Can the NRSC afford to make up much of the difference? Not without drawing precious dollars away from more promising contests.

Rossi must know that. Thus as flattering as the NRSC’s attention surely has been, he must also know that he’s being asked to make a sacrifice for the good of the party, not the other way around. And I just don’t believe that’s a sacrifice — his gubernatorial ambitions — that he’s ready to make.

Former state GOP chair Chris Vance, writing at Crosscut about the race in WA-03 to replace retiring Rep. Brian Baird:

In the end it probably won’t matter which Democrat prevails. The 3rd is a Republican-leaning district and this looks like a Republican year. Herrera is most likely going to Congress.

I have to hand it to the Republicans, when they send out a bit of spin/conventional wisdom, most of them stick to it like glue. Herrera is thoroughly untested as a major candidate for Congress, having won a single election for the state House of Representatives after she was appointed in the ultra-conservative 18th Legislative district after the Richard Curtis sex scandal. We have yet to see how she will perform on a larger stage once things heat up.

Untested candidates can win, of course. It’s one reason politics is so fascinating. Herrera is obviously smart and dedicated, and it would be foolish to underestimate her, especially with the Slade Gorton crowd so thoroughly behind her.

But WA-03 is a swing district, not a Republican-leaning district, and anyone who follows politics here knows that. People with names like Baird, Cantwell and Obama have all won here. Craig Pridemore, the state senator from Vancouver who is one of the two major Democratic contenders, won his senate seat in 2004 from long-time incumbent Don Carlson, and 2004 was hardly a banner year for Democrats.

Sure, the national zeitgeist is a huge factor, but that’s true no matter the nominees. Vance sees a GOP tidal wave building, and it’s his right to see what he wishes I suppose. The Republicans have been pushing this “repeat of 1994” stuff since last year, and frankly it’s more than a little wishful thinking on their part. The sad thing is that their noise machine will do everything it can to make it come true, of course, but it’s a long ways to the election and the GOP is not without its own woes, including a lack of money at the national level.

The Tea People have jumped about ten sharks by this point, and Republicans are still the party of nothingness, nihilism and no. Inchoate rage is not a political program, it’s just a tactic, and a pretty low-brow one at that. They still have no real solutions, only tactics and their noise machine. A lot of normal people are on to their game, at long last. That’s why “The Daily Show” is so popular.

And here’s another “riddle me this” for you: if Herrera is such a lock, why does her candidacy require so much lifting by the Slade Gorton crowd?

Conventional wisdom says that an income tax measure would not stand a snowball’s chance in hell of passing Washington voters at the polls. Well, it looks like conventional wisdom is about to be put to the test.

Later this morning a coalition of community leaders led by Bill Gates Sr. will announce their intention to move forward with I-1077, an initiative that would impose a high earners income tax on households earning over $400,000, while reducing the state property tax by 20 percent, and eliminating the B&O tax on many small businesses. Given the history of prior income tax initiatives you can be pretty damn sure that the decision to pursue this one wasn’t taken lightly, and that I-1077’s backers wouldn’t be making this announcement if they weren’t prepared to make a substantial commitment toward its passage.

In other words, I-1077 will qualify for this November’s ballot, and voters will have the opportunity to vote it up or down. And I intend to cover this historic campaign every step of the way.

Tonight there will be special edition of Drinking Liberally, and it’s All About Goldy. That’s right…it’s your chance to donate in person to HA’s blogger-in-chief. And while you’re at it, ask for his autograph.

There will be a special edition of the Podcast as well. It’s your chance to Ask Goldy All About Goldy. Here’s how it works.

For a donation, you can ask Goldy anything you want, and Goldy will “address” your question on the podcast.

Your donation must be something greater than, say, 33 cents…let’s call it five bucks or more. If you’ve donated at least $5, feel free to leave a question for Goldy in the comment thread. This is on the honor system, but please indicate in your comment that you’ve donated. For example:

5. Troll spews:

Okay, okay, I got my mommy to donate to you.

Goldy, have you ever applied for a job at the Seattle Times? HAVE YOU????

6. Mr. Cynical spews:

I donated, so tell me the truth, Goldy. How many ballots did you stuff during the 2004 election?

7. Puddybud spews:

Puddy has tithed to you this week Goldy. Now you must tell Puddy if the libtardo MSM Odumba smear factory is withholding Juan Williams’ jock straps with the tyrannical DUMMOCRAPTS Rahmbot peeps as PuddyResearch proves?

If the notion of leaving a comment in the comment thread is simply too repulsive, email your question to askgoldy@homindiviews.com.

Speaking of asking Goldy…here is a 2008 interview by Cameron Gray, co-host of the POTUS 08 show on XM channel 130, asking Goldy some questions like who financed his trip to Denver for the Democratic National Convention:

[audio:http://podcastingliberally.com/podcasts/denver2_24_aug_2008.mp3]

The Seattle chapter of Drinking Liberally meets at the Montlake Ale House, 2307 24th Avenue E. beginning at about 8:00 pm. You can join some of us even earlier for dinner.

Not in Seattle? There is a good chance you live near one of the 353 other chapters of Drinking Liberally.

BONUS (Goldy):
I will be bringing with me a limited number of original edition “I-831: Is Tim Eyman a Horse’s Ass?” initiative petitions to tonight’s DL, to which I will be happy to affix my signature in exchange for your signature on a personal check. Get these collectors’ items while they last!

Following up on my previous post, another comment from The Hill’s Aaron Blake caught my eye:

After former GOP governors passed on campaigns in Wisconsin and New York recently, Rossi is the last big prize on the GOP map.

That’s the GOP’s last big prize? A two-time gubernatorial loser, who just a year and half ago lost a 53-47 race to a governor whose approval rating currently stands at 35 percent? Could the GOP bench be any shallower?

And what does all this courtship of Rossi have to say about the other Republicans already in the race? Assuming Rossi doesn’t run (and that’s long been my assumption), how difficult will it be for party leadership to feign enthusiasm for, say, Don Benton or Clint Didier?

And speaking of party leadership, I can’t help but wonder about Washington State Republican Party Chair Luke Esser’s role in all this. Multiple sources confirm that Esser has encouraged Rossi to run against Sen. Patty Murray, and the fundraising numbers make it clear that he’s withheld state party support from the other candidates. Yet even as Rossi’s dithering makes a Republican victory less likely with each passing day, Esser refuses to swing party support behind a candidate who actually wants the nomination.

Why? Well, Esser is a Rob McKenna protege, and the last thing he and his boss want is a gubernatorial primary battle against Rossi in 2012… a bump in the road that would surely be avoided should Rossi run for senate, win or lose.

Forget Rossi v. Murray. Rossi v. McKenna is what these machinations are really about.