Jerry Kopel

Watch out! Tony Soprano is coming to town and bringing his money with him. With a fast growing state like Colorado and a lot of marks who need a quick $500 "and I'll pay you back in a week", the place is made for the New Jersey hero of the HBO Soprano series.

The legislature has passed SB 144 by Sen. Dave Owen, R-Greeley, and Rep. Lola Spradley, R-Beulah, "concerning the regulation of deferred deposit loans", also known as paycheck loans, which allow the lender to get up to $575 back in a week by a postdated check, for lending $500.

Rep. Paul Zimmerman, D-Thornton, told the House during debate (according to the Rocky Mountain News) "We're probably talking about a 700 percent rate". Actually that's a low estimate. If you loan the same $500 out each week for a year, you make $3,900 in interest and still have your original $500. It's an even higher percentage if you loan the same $300 out each week for a year. You make $3,100 in interest and still have your original $300.

For his troubles in taking up the plight of the consumer, with a passing reference to Tony Soprano, Zimmerman was greeted the following day at his desk by a dead fish wrapped in newspaper, a large black handprint, and an accompanying note supposedly from the Soprano family.

More than a decade ago, after complaining on the House floor about the possibility of organized crime using state lotto numbers for their unlawful numbers racket, I found on my House desk a pair of boots encased in cement accompanied by a note written, if read aloud, to sound like broken English with an Italian dialect.

When the papers ran the picture and the contents of the note, I got HATE mail for disparaging people of Italian ancestry. Hey, it wasn't me. It was the same character that left the fish on Zimmerman's desk: Frank DeFillipo, former House member and now wealthy, successful lobbyist.

What is most fascinating about this bill, which allows charges of 20 percent on the first $300 and 7.5 percent on the next $200, is where it places Colorado on the ladder of states with paycheck loan laws. As of Sept.15, 1999, 21 other states and Washington, D.C., allowed such lenders to flourish.

On the amount allowed on the first $300 (twenty percent) Colorado is higher than Arkansas, California, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Nebraska, North Carolina, Ohio, South Carolina, Tennessee, and Washington state. Two states, Missouri and Nevada set fees by regulation.

The Colorado paycheck lending industry wept that they couldn't make a living at less than 20 percent per week, which is why lenders in all those states listed above are now on food stamps, or filing for bankruptcy.

SB 144 does contain some debtor "protections" which aren't going to mean much if you really are desperate. The lender will have to tell you the actual percentage rate being charged. The debtor gets a statement that "a deferred deposit loan should only be used to meet short-term cash needs." (It would have been more helpful to have the notice suggest the debtor get a loan from a pawn shop which can only charge 10 percent per month under Article 56 of Title 12.)

The amount financed at any time cannot exceed $575. There is a right to rescind (and give the money back) by 5 p.m. the next business day. A paycheck loan cannot be renewed more than once. If renewed prior to the date the original debt was due, the lender must return the interest portion not earned.

If the postdated check isn't good, the debtor also owes a $25 charge, court costs and reasonable attorney fees which can't be more than equal to the debt actually owing.

* * *

Perhaps you missed the article in the April 2 New York Times about desegregation in the classroom. While the article didn't single out Colorado, the statistics certainly did. The question being asked was "what percentage of a typical black student's classmates are likely to be white?"

The article compared the 1989-90 school year with that of 1997-98. Figures on 1989-90 were not available for six states. And no numbers were given for Idaho. So of 43 states in 1989-90, the chances of a black student's classmates likely to be white in Colorado was 53.8 percent. That ranked Colorado tied with Rhode Island as 16th from the best state, which was and still is Vermont.

The problem is these statistics are skewed in favor of states such as Vermont, Maine, New Hampshire and North Dakota with few black students per general school population. As you might have guessed, among the worst states in 1989-90 and 1997-98 were New York, Michigan, Illinois, California and Maryland.

In 1997-98, the likely number of white students in classrooms with black students in Colorado dropped to 45.8 percent, which placed our state 21st from the top out of 49 states. However, Colorado's drop from 53.8 to 45.8 was the fifth WORST percentage number of the 43 states which could be compared between 1989-90 and 1997-98. That percentage drop is a key statistic indicating resegregation.

The article's author concludes "now that legal and public tolerance for even mildly coercive forms of integration appears to be evaporating, the hope of integrated schools may soon be a distant memory." Nationally, only three states showed improvement in 1997-98 as compared to 1989-90.

Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.

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