Local leaders, vet groups protest payday lenders

By: DARRIN MORTENSON - Staff Writer | Friday, July 8, 2005 11:48 PM PDT ∞

OCEANSIDE ---- Saying they wanted to send a message to state and federal lawmakers, several local officials and representatives of local veterans groups made a public stand in downtown Oceanside on Friday, calling for limits on interest rates on payday loans to military service members.

Gathering first at City Hall, and then moving to the nearby Cash-N-Advance store on Main Street for a better on-camera backdrop, San Diego County Supervisor Bill Horn, Oceanside City Councilman Rocky Chavez and Escondido Mayor pro-tem Ed Gallo blasted the industry they called "legalized loan sharks."

The institutions lend troops and civilians short-term loans at high interest rates that often compound if the borrower does not pay right away.

The delegation in Oceanside on Friday said it knew of service members whose interest payments had grown to as much as 500 percent of the original amount of the loan.

Chavez said there were 27 such lenders in Oceanside.

While he said that no more of the lenders can get businesses licenses from the city because it has reached its limit of the type according to zoning laws, he said the city has no power to shut the existing lenders down or control the rates they charge.

Such loans are a "trap" set by "predatory lenders," said retired Army Col. Ron Duchin, who led the small delegation in front of the Cash-N-Advance on Friday.

Duchin, who heads the advocacy group Concerned Veterans Communication Coalition, said he wants the Veterans Affairs and Armed Services committees in Congress to hold hearings on legislation offered by lawmakers from Georgia and Pennsylvania to limit the interest rates those institutions can charge.

He said he wants to cause a "groundswell" of support for limiting the rates to 17 percent, he said.

The swell would have to be powerful to topple the entrenched interests of the banks and savings and loans who lobbied successfully to have the usury laws defanged in the 1980s, he said.

"If this gets a hearing, then we have a voice," Duchin said.

Jennifer, an employee at one of the lenders, the Cash-N-Advance at 3152 Main St., would not give her last name but said the public officials and others "in the suits" outside her shop Friday "don't understand."

"People are just trying to get by," she said, adding that she fears for her job every time politicians target her employer.

She said her husband is a Marine sergeant, and that the politicians might better spend their efforts trying to get better pay for service members and better benefits for military families who have to live in expensive areas like North County.

"We live on base and we still struggle," she said.

"They don't have to deal with it," she said of the dark-suited delegation.

Duchin said pay raises for service members were not a part of his group's agenda.

Neither Chavez nor Horn would touch that topic, either.

Horn said that if the community comes together behind the issue of the high interest loans locally now, during a war, it could become a more visible national issue and could get a hearing.

"Something needs to be done," he said. "This may be a small start, but it's a start.

"We cannot put them out of business," Horn said. "But we need state and federal legislation to stop this.

"It's time to say enough is enough."

Contact staff writer Darrin Mortenson at (760) 740-5442 or dmortenson@nctimes.com.