Legislative Tactics of Unregulated Lenders

Abstract

State legislative lobbies of unregulated lenders resort to tactics generally identical with those of a modern dictatorship waging a propaganda campaign against a neutral state selected for invasion. In each case efforts are made to confuse, to divert attention, to soften up the opposition and, to secure the assistance of agents within the victimized ranks. Like Soviet Russia, nominating Finland as an aggressor, or like Nazi Germany, pretending fear of invasion from Poland, lobbies for unregulated lenders open a publicity campaign against licensed small companies in advance of a state legislative session at which an attempt to tighten the small laws is expected. With the aid of scandal sheets and sometimes with the aid of standard newspapers, the lobbyists inspire attacks upon licensed small companies as loan sharks, legalized racketeers, and 42 percenters-where that annual charge is allowed by law. This method of attack is carried on throughout the session by speakers before legislative committees, through newspaper advertisements and on the floors by members of legislative houses. Lobbyists and members of the legislature who have been won over to the side of the unlicensed lenders impugn the motives of legislators, editors, or bar association committeemen, who work against them, using the phrase tools of the sharks, and similar epithets. When all else has failed, the last resort is to parliamentary delaying tactics, including the filibuster. The purpose of such a campaign is manifold. The lobby hopes to attain one or more of these objects: to confuse the public and uninformed legislators; to discredit and embarrass disinterested crusaders against the racket; to prevent passage of the complete Uniform Small Loan Law or of an amendment to enlarge the scope of the existing law to cover salary buying or other lending dodges; to repeal the entire Uniform Law, if such a statute is on the books, as a method of eliminating competition from licensed lenders, or as a confusing counter-attack; to lower the rate licensed lenders are allowed to charge borrowers so that they can no longer do business and so that revenue of supervisory officials from license fees shall be inadequate to finance * Managing editor, The Daily Democrat, Tallahassee, Florida. Newspaper writer in Georgia, North Carolina and Florida, since I921; editorial writer and political commentator on Florida newspapers, since I925. Commissioned by Governor in I940 as Director of Information, Education and Morale on Florida Defense Council. Conducted editorial campaign for regulation of unlicensed lenders during Florida legislative session 1939. Author, How A FEW FLORIDA LEGISLATORS SAVED THE 240% LOAN SHARK RACKET OF THE SALARY BUYERS (1940).