It’s been a familiar theme in the halls of the North Carolina General Assembly for decades and yet it always comes as a bit of shock when the realization hits that the snake oil salespeople are back yet again to peddle their wares. I speak, of course, of the lobbyists for any number of corporate special interests who descend upon the Legislative Building each year.
It really is a remarkable phenomenon when you think about it. No matter what the state of incomes, interest rates, the job market, the stock market, consumer bankruptcies, foreclosures or any other indicator of average citizen well-being, highly-paid people in expensive suits troll the halls of the General Assembly to flog the notion that all of us would be better off — even the poor and unsophisticated — if lawmakers and regulators would simply trust their corporate clients more than those pesky regulators and consumer advocates.
The most visible anti-consumer effort thus far in 2014 revolves around the issue of automobile insurance and the efforts of some large companies to get out from under a regulatory structure that has helped make North Carolina home to among the lowest car insurance rates in the country. Their pitch: that North Carolina must lessen regulation by the state Insurance Commissioner in order to free up insurance companies to offer discounts to consumers.
We’re not making this up.
In effect, these lobbyists are advancing the same old tired idea that if the “genius of the market” is unleashed to work its magic, some consumers will see their rates go down. But, of course, the flipside to this is that many others will see their rates go up — a lot (along with corporate profits).
You would think that such an obviously self-serving plan would be dismissed out of hand by any politician with a modicum of horse sense — especially given North Carolina’s already low rates. Sadly, however, politics being what they are and politicians being what they are, this has not been the case. Instead, some legislators are seriously advancing the proposal.
Sadly, auto insurers aren’t the only industry types pitching snake oil during the 2014 short session. As reported on The Progressive Pulse last week, the high-cost lenders in the consumer finance industry are making a money grab as well – one that’s perhaps even more remarkable than the auto insurance scam.
It seems that the loan companies are unhappy with a modest protection added to the law last year when they prevailed upon the General Assembly to jack up the cost of loans beyond their then-already exorbitant rates. It requires lenders to take the simple step of making sure that they do not extend loans to lower ranking enlisted personnel in the military without at least notifying their commanding officers. It also prevents lenders from trying to collect on loans via phone or email from service members or their spouses while the service member is deployed to a dangerous area.
Now, less than a year after the protections were enacted, it appears that at least some lenders want the law (or its enforcement) weakened. For some time, it has been rumored that industry lobbyists have been working on such an effort and recently, insiders report, an industry representative confirmed the rumor.
You got that? The caring souls in the consumer finance industry – the folks who loan money to desperate borrowers at rates of 30% or 40% or more (including fees) and who have been documented to repeatedly “flip” the loans of a huge percentage of their borrowers so that escape from the debt can become extremely difficult – can’t be bothered to see if they’re impacting national security by sucking in some poor 20 year-old recruit at Fort Bragg or Camp Lejeune into a high-cost loan.
Rob Schofield is director of Research and Policy Development for NC Policy Watch. This column is an abridged version of “Consumers under fire yet again on Jones Street,” published at ncpolicywatch.com