By Dan Murphy
As millions of Americans await their stimulus checks under stay at home orders, some are being lured into borrowing money from high interest-predatory lenders, also known as payday lenders, who charge interest rates as high as 30% PER MONTH. In recent years, under the Trump administration, the de-regulation of predatory lenders, also called payday lending shops, has resulted in more high interest loans, and more rip-offs of lower and middle-income Americans.
In the race for Congress in the 17th District, (Mid-Northern Westchester & Rockland County) State Senator David Carlucci’s record on accepting contributions from payday lenders has been called into question. While Westchester county, and the 17th Congressional District, has among the highest rates of COVID in the country, a record of Carlucci’s campaign finance reports reveal that he received $2,000 in his run for Congress, and thousands more from Payday and predatory lenders.
Adam Schleifer, one of the 7 other challengers in the Democratic primary in NY-17, took direct aim at Carlucci on the matter. He contrasted his background as a former consumer protection regulator under Governor Andrew Cuomo, who forced the same predatory industry to payback New York taxpayers millions, with Carlucci’s record on accepting their contributions. Because Carlucci represents almost all of Rockland County, which makes up 60% of the district, some consider him well-positioned to replace Nita Lowey in Congress. In making the contrast, Schleifer noted, “I’ve devoted substantial efforts to stop predatory lending,” to that of Carlucci “we have an opponent in this race that is captive to a pernicious industry.”
As a State Senator in Albany, Carlucci has a nine-year history of accepting campaign contributions from the check-cashing industry and sponsored bills in Albany to expand its services. In his first term in the state senate, he voted to give check-cashing businesses the power to make payday loans.
Just before that vote, campaign finance records show Carlucci receiving his first $1000 contribution from NY Check PAC. One month later, Carlucci got a $2,000 contribution from the same group. Since then, Carlucci has received 15 contributions from payday lenders as a state legislator over 6 years in the amount of over $11,000 during which time he tried to legalize payday lending in NY a second time in 2016.
In the State Senate, Carlucci Co-Sponsored Community Financial Services and Modernization Act, Which Would Legalize Payday Lending In New York State. Carlucci, along with his Independent Democratic Conference colleagues Diane Savino and Tony Avella, introduced the Community Financial Services and Modernization Act of 2016, which would have allowed check-cashing businesses to operate as financial services providers and issue credit, including payday loans. (New York State Senate Bill S6985A, 2015-2016 Legislative Session)
The contributions from the payday lending industry have continued in Carlucci’s run for Congress. Federal Election Campaign reports for Carlucci show that his Congressional Campaign Received $2,000 From Payday Lenders in March 2020. On March 5, 2020, Carlucci for Congress received $1,000 from ACPAC, the political action committee of the Association of Credit and Collection Professionals (which includes payday lenders).
Carlucci’s campaign also received $1,000 on March 9, 2020 from PLS Financial Services Inc Good Neighbor PAC. PLS is a financial services provider that provides check cashing services in New York and payday lending in other states. (Federal Election Commission report filed by Carlucci for Congress, 4/15/20)
When taken in total, State Senator David Carlucci and Congressional candidate David Carlucci has accepted $14,000 from businesses that prey on his constituents. Carlucci did little to clarify his position when asked recently, saying “I’m unbought and unbossed,” and “I’ll work with anyone. I’ll work with the check-cashers, to see how we can work to make sure the best financial services are available to the people who need them most.”
Many democrats in the 17th District would not agree with Carlucci’s characterization that payday lenders are among “the best financial services.” Economic instability during COVID has most likely catalyzed a huge spike in payday lending in states where it’s legal. Utah’s Better Business Bureau has already seen the same number of payday lending complaints in the first four months of 2020 than it received in all of 2019.
And when Carlucci’s bill was introduced in 2016, Sara Ludwig, from the nonprofit advocacy organization New Economy Project, called it “a plague,” and Richard Cordray, Director of the Consumer Financial Protection Bureau, compared payday loans with “getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey.”
One democrat in the district, who voted for Nita Lowey, “ten times over twenty years,” said. “Is this what this race has come down to? Do we have someone running to replace our great Congresswoman Nita Lowey, who is ok with companies charging the young and the poor interest rates of 300% per year?
Peekskill Democratic Chairwoman Drew Claxton added, “At the end of the day, democratic voters aren’t going to support a candidate who has taken money from and supports an industry that charges ridiculously high-interest rates on low-income Westchester and Rockland residents who just want access to their own money.”
Last week, a Democratic insider told Westchester Rising that “The congressional race for New York’s 17th District will come down to two people: Adam Schleifer and David Carlucci.” In a field of eight candidates, we have our first legitimate rivalry in the race to replace Nita Lowey.
