A Predatory Lender's Empty Threats

If you followed the debate over a bill allowing a predatory lender to charge millions of dollars more in high interest rates, you know that the key question, at the end of the day, was: Will the lender, OneMain Holdings, leave Colorado if it can't make even more money here?

In a Denver Post op-ed over the weekend, I addressed this question by comparing last year's debate about predatory-lending legislation to this year's.

This year, the bill's sponsor, State Rep. Jovan Melton (D-Aurora), was quoted as saying that OneMain will pack up its money bags and leave Colorado unless it's allowed to raise interest rates on more loans. It already charges 15- to 36- percent on loans, per state law, and wants to apply those rates to more loans for people whose poor credit history precludes them from getting more favorable interest rates:

"I'm running this [legislation] for progressive reasons," Melton told The Durango Herald last month. "If we don't do something about this now, then we're going to lose that last company, which means the only option we'll have left is payday lenders." [BigMedia emphasis]

Trouble is, Melton essentially said the same thing last year, when a similar bill was under consideration, and, lo and behold, OneMain didn't go anywhere.

"This is one of those issues where you almost have to hold your nose and still vote for it, because if you don't, the branches will close, and the only option you'll have is payday lending," Melton told The Herald last year. [BigMedia emphasis]

A year has elapsed, and OneMain is still in Colorado, and payday lending is not the only option. In fact, OneMain's business has grown by a healthy 30 percent, even as some branches have closed, following a merger and an industry trend toward online (and more efficient) business.

So now that House Democrats have killed the predatory-lending bill, who expects Colorado to "lose that last company," as promised by Melton? I wouldn't bet my house or even my doghouse that it's going away.

And if OneMaind doesn't leave, and the company or its supporters trot out a sob story next year about needing to flee Colorado because profts are so intolerably low here, we'll know what to tell them.