Howard Karger, AlterNet, Jan. 11, 2006
Reverend Al Sharpton finds solace in strange places.
“When I’m out fighting for the little guy and I need quick cash, I find comfort in knowing that LoanMax is here for me.”
This is from a television ad he did in early December for LoanMax, a predatory auto title lender. After some criticism, Sharpton relented and declared a moratorium on the ads, saying he wants more financial data from LoanMax.
What data does Sharpton need? To get an auto title loan, a borrowers put up their car title as collateral along with an extra set of keys. They get a 30-day loan equal to a maximum of 50 percent of their vehicle’s trade-in value. If the loan is repaid on time, the borrower gets the title back. If not, the vehicle is repossessed and sent to auction. In some states, the lender keeps the full proceeds of the auction, even if it exceeds the loan. To be fair, LoanMax isn’t interested in repossession since it makes more money from customers’ rolling over their debt from month to month. Trapping customers in a cycle of debt is the cornerstone of fringe lending.
Sharpton claims he was recruited for LoanMax by Lamell McMorris, a civil rights activist and founder and CEO of Perennial Strategy Group, a consulting and lobbying firm. Quoted in the New Pittsburgh Courier, McMorris said, “I know a great deal about LoanMax because the owner of the company [Rod Aycox] is my best friend. LoanMax is not a predatory lending institution. As far as I’m concerned, they’re green-lining a redlined America.” Perennial wrote and disseminated LoanMax’s rebuttal to attacks on the Sharpton commercial.
The main opposition to predatory lending comes from Democrats, and if fringe lenders can divide the leadership, the industry will be more secure. Part of the industry’s strategy involves neutralizing or dividing African Americans over the issue. Unfortunately, this tactic seems to be working, at least on the basis of the silence of prominent civil rights activists like Jesse Jackson, Julian Bond and Bill Cosby. So far, no black leader has commented on Sharpton’s swim with the LoanMax shark.
(Posted on January 13, 2006)
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