Whitney: The Money Man of Payday Loans


In 2007, when the Iowa state legislature was considering an interest rate cap on auto title lending, Rod Aycox visited the heart of the country.

The founder and CEO of Atlanta-based Select Management Resources owns approximately 660 securities lending stores in 21 states, including North American Title Loans and LoanMax in South Dakota. He is one of the titans of an industry that earns over $ 4 billion a year in interest charges.

Aycox, a former used car salesman and pawnshop owner, flew to Quad City Airport in his private jet and defended the nature of his business, which critics say is predatory for targeting low income customers with high risk loans that carry interest rates as high as 400 percent.

“To say my customers are stupid is disgusting to me,” Aycox told reporters at the time. “Opponents say my clients don’t have enough common sense to make their own decisions, but they do.”

The Georgian businessman lost that 2007 battle when Iowa passed a rate cap on car title lending, but payday loans are still commonplace in this state and 35 others, attracting a increased attention from lawmakers and nonprofit groups that link revolving loans to poverty rates.

The fight has only just begun. And South Dakota is in the thick of it.

The Mount Rushmore State payday loan dispute is a key crusade for Aycox, a 48-year-old who dropped out of college, once described as “the industry’s most passionate evangelist” when he It is about fighting legislative or electoral reform with aggressive and well-funded tactics.

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“He will do anything to get his message across,” says Sioux Falls business owner and former political agent Steve Hildebrand, who led the charge to secure a vote restricting payday lending in the November poll. . “The industry is under attack, and it should be. Every day (short term lenders) wake up and look for ways to fuck low income families. It is their economic model. “

Aycox and his family have made strategic gifts to federal, state and local political candidates, especially when their interests are threatened. Industry-wide, major securities lenders have injected more than $ 9 million into the state’s political campaigns over the past decade.

South Dakota’s current petition fight presents a new kind of battleground, however, as the issue of an interest rate cap would go directly to voters, with politicians unable to directly influence the outcome.

This forced Aycox to dig deeper and find new tips. So far, his company has spent more than $ 2.1 million in South Dakota to thwart Measure 21, Hildebrand’s effort to vote through the South Dakotans for a responsible loan that would cap the 36% short-term loan rate, which most insiders say would cripple the industry. in this state.

Most of that $ 2.1 million was used to support a rival committee called South Dakotans for Fair Lending, confusing voters. The petition group sponsored a constitutional amendment that would cap interest rates in South Dakota at 18% per annum, but allow higher rates if the borrower agrees, what Hildebrand calls a “protection law. payday lenders “.

A significant chunk of Aycox’s investment, nearly $ 1.6 million, went to a California company called the Silver Bullet Group to bring in petitioners hired to bolster the constitutional amendment and obscure the issue. of potential signatories by linking it to Marsy’s Law, a victims’ rights bill and separate amendment.

Aycox did not return a phone message this week, but Hildebrand found it ironic that the residency of some of his group’s petitioners was legally challenged, even clumsily, when the rival committee used outside mercenaries. state to chase signatures with Aycox. money.

“This is the same guy who sabotaged my restaurant and tried to ruin my business,” says Hildebrand, referring to the professional protesters hired to pose as missionaries to clutter up Josiah’s cafe and cafe last summer during of the petition campaign. “He’s not a guy from South Dakota, he’s from Georgia, and when all of this happened it raised an incredible awareness of this issue.”

As tensions rise, David’s sentiment against Goliath in this battle is hard to ignore. Hildebrand’s group spent less than $ 20,000 during the petition process, using local volunteers to collect and submit 19,936 signatures, of which 17,222 were deemed valid, an error rate of less than 14%.

“I am proud to hold this position,” said Hildebrand, who served as deputy director of the national campaign for Barack Obama in 2008. “I am proud that our committee was thrifty and that hundreds of volunteers from across the state. help us circulate these petitions. It was a true South Dakota land effort.

Ten months before the elections, a serious skirmish between the base and the scorched earth is still looming. In addition to the disputed South Dakotans for Responsible Lending signatures, a legal battle is underway over whether Attorney General Marty Jackley should rewrite his explanation of the 36% capped vote measure to underscore the seriousness of such a move for the ‘industry.

This is a minor maneuver compared to what may still be underway, given the past willingness of Aycox and his associates to throw money, lawyers and obfuscation on anything that threatens their field. .

“I think they’re going to spend $ 8-10 million on TV ads designed to confuse voters,” Hildebrand says. “They are going to have a huge financial advantage over us. “

Experience can also play a role. Nationally, Aycox has made its way into emergency policy issues for the payday and payday lending industry, with a focus on influencing outcomes:

– As Ohio contemplates tougher laws to curb interest rates charged by short-term lenders, Aycox donated $ 115,000 to lawmakers in a recent two-year election cycle, in part of a global influx of $ 320,000 by payday lenders to majority legislative Republicans. The problem persists in the state.

– Aycox has been identified as the main funder of a 2014 Michigan bill subjected to a lame duck session that allegedly added a loophole to state law by allowing auto title lenders to charge “User fees” in addition to the capped interest rate of 36 percent. The measure was ultimately rejected.

– During the 2012 presidential campaign, Mitt Romney’s “Restore Our Future” super PAC accepted a check for $ 100,000 from the Rod and Leslie Aycox Foundation, in violation of tax laws that prohibit nonprofits to “actively intervene” in a political campaign. The money was refunded and Aycox made a personal donation of $ 100,000 to the pro-Romney group.

– In the interest of bipartisanship, Aycox made a token donation of $ 1,500 to South Dakota Senator Tim Johnson’s South Dakota First PAC in 2010, just before the Democrat became chairman of the Senate Banking Committee.

Most of that spade work is done behind the scenes, but Aycox made an appearance in Sioux Falls during the petition uproar last summer. He stopped by Josiah’s house and lied that he was an old friend of Hildebrand during the Obama campaign.

Hildebrand reluctantly agreed to meet the Atlanta millionaire, who spent four hours at the downtown coffee shop “pulling it together,” in Hildebrand’s words, and making vague threats.

Aycox has denied having any association with Floyd Pickett, the so-called “Deacon Pete” who directed the disruption of business at Josiah. But Pickett in 2012 organized a $ 25,000 donation to a community center in his hometown of Peoria, Ill. From the Rod and Leslie Aycox Foundation.

Pickett at the time was called “contract work” for Aycox and told reporters from his boss: “This man gives and expects nothing in return.”

Hildebrand has taken into account the poetic absurdity of these words and is convinced that when people finally have their say on this issue, Aycox will meet his equal.

“I have no doubts that the good guys will win,” says Hildebrand. “I say this because I think the people of South Dakota are seeing through the gambling and the corruption that plagues the payday lending industry, and I think they are fed up with it.”

In a final twist of the saga, it’s interesting that with Atlanta-based Aycox so focused on protecting his interests in South Dakota, he appears to have abandoned the state with some of the toughest laws. against payday loans in the country.

It would be Georgia.

Argus Leader Media City columnist Stu Whitney can be reached at [email protected] Follow him on Twitter @stuwhitney


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