Stefanowski’s company lobbied for high-interest loans while he was CEO.


Bob Stefanowski says he is a corporate reformer who was not responsible for misleading consumers when he was CEO of one of the world’s largest short-term loan companies.

But during the same period that the Republican gubernatorial candidate claims he was changing DFC Global Corp.’s corporate culture, one of his top lieutenants fought Hawaiian lawmakers in a successful campaign to keep the company’s high interest rates in check. In this state.

On the other hand, a former colleague of Stefanowski from General Electric in the 1990s, who as a major in the US military had to deal with the aftermath of short-term loans obtained by his troops, joined the campaign of Democrat Ned. Lamont for governor.

Archie Elam of Stamford, a 1976 graduate of the United States Military Academy, appears in radio and television ads criticizing companies like DFC, claiming they prey on unintelligent and financially distressed consumers, including military personnel with families. youths.

During a recent interview, he said his soldiers had no direct dealings with Dollar Financial, but he is speaking out against such entities, as well as against Stefanowski’s candidacy.

Kendall Marr, a spokesman for Stefanowski, said Elam’s criticism is a “false line of attack.”

“As we have already made clear, when Bob came to DFC, he tried to correct the problems the company had struggled with in previous years, which included making sure the aggrieved received full compensation and seeking reforms to make the products offered were fairer and for the consumer. “Friendly,” Marr said.

Marr declined to specifically address the issue of the Hawaiian lobbying effort. It came a few months after Stefanowski took over the company, and the campaign has said that Stefanowski worked to change the way DFC operated.

$ 21,000 in lobbyists

DFC, repeatedly known as Dollar Financial Corp. or Dollar Financial Group, spent more than $ 21,000 on lobbyists in 2015 and 2016, with the goal of derailing the reform of the law, according to the financial report. Hawaii State Ethics Commission records.

Records indicate that a lobbying firm, Capitol Consultants of Hawaii, a Honolulu company, was hired in the effort.

At the time, February 2015, legal and social services advocates, including Goodwill Inc., supported limiting interest rates to 36 percent, in an attempt to protect low-income island residents from annual interest rates that could reach 459 percent.

These high-interest, short-term loan operations are virtually prohibited in many states, including California, New York, and Connecticut, which cap interest rates at 12 percent for loans under $ 10,000. Twenty-two other states, including Hawaii, Florida, Kansas, Texas, and Virginia, allow so-called high-cost loans, sometimes known as payday loans because they are used by people who don’t have enough money to make it to their next payday.

In February 2015, four months after Stefanowski was hired as CEO, Kerry Palombo, the company’s North American chief compliance officer, complained to Hawaiian lawmakers that the consumer-friendly bill would cut revenue from the company in that state by 60 percent.

“The 36 percent rate cap referenced in one of these bills would not only prohibit us from operating profitably, it would put payday lenders out of business entirely,” Palombo said in testimony before the Hawaii State Senate Committee on Commerce and Consumer Protection. “We oppose legislation that would put us out of business and leave our clients with only less desirable credit alternatives.”

The bill died in the then Hawaii legislature.

Stefanowski was CEO of the company from November 2014 to January 2017. He says he changed the culture there, laying off 30 executives.

His campaign for governor is his first run for elective office. Stefanowski was hired by DFC in the wake of a UK loan scandal.

Some of the company’s tactics were revealed in a recent Hearst Connecticut Media Group. report, which noted that some British consumers had loans stolen that they took up to five months after Stefanowski joined the company. Some of the UK loans included interest rates above 2,900 per cent, prompting the UK Financial Conduct Authority to order Dollar Financial to reimburse 147,000 customers $ 24 million.

Broke young soldiers

In 2013, the year before Stefanowski was hired, a Dollar Financial subsidiary in the US agreed to repay $ 3.3 million to military service members and veterans who were drawn to high-interest auto loans.

Elam, 63, was a US Army commander stationed in Virginia in the early 1990s, when he saw firsthand the dire financial situation and cycle of debt facing his young soldiers.

“Victimizing vulnerable people doesn’t ring true to me,” said Elam, a permanently disabled veteran of the first Gulf War. He first learned about payday loans when he received letters from lenders about defaulting soldiers. When he read a payday loan agreement, he was disturbed by the terms and conditions.

“It is a persistent problem,” Elam said. “If I had my way, I would just ban it across the country and no longer allow it. These are young people, 19, just over 20, very often with families and young children, who are short of money. They say, ‘Hey, if you need $ 1,000, it’ll only cost you $ 100.’ They don’t tell you that it gets worse every two weeks. The next thing you know, they are above their heads. Ninety-nine percent of them are buying food for their families ”.


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