Chris Sununu has accepted at least $7,250 from predatory title lending king Rod Aycox through his Company Select Management Resources, which does business as LoanMax.
Read more about Aycox here.
The multi-billion dollar title loan industry feeds upon people so desperate to make ends meet that they will borrow at excessive interest rates using their cars as collateral. The borrowers then get caught in what is known as the title loan “trap.”
The Financial Industry Regulatory Authority, a “not-for-profit organization authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly” reports:
“Of the 3.5 million vehicle title loans analyzed by the Consumer Finance Protection Bureau (CFPB), the average loan amount was $959 and carried an annual percentage rate of around 300 percent.
Most borrowers (80 percent) are unable to repay their loans, plus the interest and fees added to each loan, within the specified time period. Instead, the original loan gets rolled into a new loan the same day their original loan is due. The CFPB calls this a “loan sequence.”
Over half of loan sequences are for more than three loans, and more than a third of loan sequences are for seven or more loans. These loan sequences have the potential to destroy a borrower’s credit, given that borrowers who take on increasing amounts of debt over time are at greater risk of default. According to the report, only a small number of loans (one-in-eight) were repaid in one payment cycle.”
Title lender interest rates were briefly limited in New Hampshire, after Gov. Lynch and the Democratic-led legislature implemented consumer protections in 2009. Those were short lived, as the Republican-led legislature overrode Lynch’s veto to reverse the protections in 2012. See Concord Monitor story here. As a result, NH’s title lenders can charge 300% annual interest (25% per month) today.
Aycox and others like him know that they—not low-paid workers who fall on hard times—have a friend in Sununu. A few campaign contributions are a small price to pay to make sure their empire of exploitation isn’t threatened.