High-Interest Lender Violated Contribution Limits
Auto title lender got business break in proposed state budget
June 14, 2011
Madison – The owner of an auto title loan company that got a break in the proposed 2011-2013 state budget to let his business resume in Wisconsin contributed $13,250 in 2010 to legislative candidates and a committee – a violation of state campaign finance laws, the Wisconsin Democracy Campaign says.
The Democracy Campaign filed a complaint with supporting documents Tuesday against Robert Reich of Deerfield Beach, Florida who owns Community Loans of America which does business at 22 locations here as Wisconsin Auto Title Loans. The complaint filed with the state Government Accountability Board accuses Reich of violating Chapter 11.26(4) which prohibits individual donors from giving more than $10,000 in a calendar year to state and local candidates and political committees.
Campaign finance reports show Reich made contributions to 19 legislative candidates – 15 Republicans and four Democrats – and an Assembly Democratic fundraising committee run by legislative leaders to squeeze special interests for money to spend at election time. The reports show he made 13 contributions of $250 to Assembly candidates, seven contributions of $1,000 to Senate candidates and one $3,000 contribution to the Assembly Democratic Campaign Committee.
Last month, the budget-writing Joint Finance Committee inserted a proposal in the state budget to allow auto title loans to resume being made in Wisconsin. The budget provision repeals part of a law effective January 1 that banned those kinds of loans. Critics say auto title loan outfits take advantage of the poor and others who have few credit options by charging outlandish interest rates on short-term loans. The legislature will consider the proposed 2011-2013 state budget this month before sending it to the governor for final approval.
In addition, the state Justice Department filed a complaint and a request in May to join a Milwaukee County Circuit Court case against Wisconsin Auto Title Loans. The ongoing civil case and the state’s complaint accuse the company of deceptive and unconscionable conduct for packing an optional product at extra cost into its loan packages without the borrowers’ knowledge, or telling customers the product was mandatory.