Leo Ryan was a visionary and heroic Democratic congressman from San Francisco from 1973-1978. Rep. Ryan was a pioneer in â€œexperiential legislationâ€, in which he thoroughly researched any issue that he wanted to address through legislation. As a member of the California state assembly in 1965, just after the Watts Riots, he actually went there and took a substitute teaching job to learn all he could about the conditions in Watts. In 1970, using a false name, he had himself arrested, detained, and strip-searched so he could get a look inside Californiaâ€™s prison system. He stayed for ten days. Why? Because he was the chair of the prison reform committee.
Having investigated the dangers of cults, he became concerned about the situation in a far-flung compound known as Jonestown. As documented in the chilling film Jonestown: The Life and Death of the Peopleâ€™s Temple, Ryan went there to investigate, and when he tried to leave with a few people who wanted to escape Jim Jonesâ€™ madness â€“ he was shot dead.
What better example could ever exist for any politician?
And what does this have to do with payday loans?
Wisconsin State Assemblyman Gordon “Job Killer’ Hintz has a bill that will kill payday lending in Wisconsin, robbing consumers of a vital choice for short-term credit. Does anyone think that Job Killer Hintz has spent even one day living the life as someone who lives paycheck-to-paycheck?
I’m betting he hasn’t.
Yet he somehow has developed the audacity to declare how other people should live their lives, and dictate what form of credit should be available to them. Imagine that!
Let’s put the Leo Ryan Test to Job Killer Hintz.
Before introducing his job killing, credit-restricting, consumer-harming, politcally-motivated bill to the Legislature, let him live the life of those who use payday loans.
He has to empty his wallet. Toss out the credit cards. Lock himself out of all access to his savings and those of his family. His entire family gets $1900 every two weeks to live on, and we’ll assign all of that to his paycheck only. And he can’t tell anyone he’s doing it. You know, kind of life Mel Brooks in Life Stinks.
Now, Job Killer Hintz must live like this for six months.
What luxuries will the Job Killer give up? What will he learn are absolute necessities? Will his paycheck be enough to cover them? Can he live without his weekly manicure? When an emergency occurs, as it inevitably will, what short-term credit option will the Job Killer choose? Let’s say his car breaks down. He needs it to drive to his job to the Capitol — a job that he still has while trying to kill 3,542 others. The car repair bill is $250! And he’s spent every last dime from his paycheck. What to do?
Should he call some friends for a loan? Family members? Could be embarrassing. He can’t tell them this is the Leo Ryan Test, so all he can say is, “I just don’t have the money”. What will they think of him? And what if he can’t pay them back? It could damage his relationship with them. My God, what would Mother say?
He has no credit card, so he can’t charge anything and he can’t get a cash advance.
He gets an idea! He’ll write a check to the mechanic for $250, even though he doesn’t have enough in the account. He’s got overdraft protection, so the mechanic will get paid. He’ll get dinged for a few bucks for the check, but it’ll solve the problem.
It works just fine. Then he gets his bank statement. That $250 bounce cost him $30 in NSF fees and $30 in returned check fees from the mechanic. Sixty bucks. Wow. That’s 8700% APR. Wow. He never thought of it that way! Oh no, it’s worse! He forgot that by bouncing that check, it triggered bounce fees for 4 other checks! That’s another $240 in fees! Augh!
A few weeks later, the A/C unit in his house breaks down. It’s hot. It’s summer. $400 to fix it. Now what? He sure won’t bounce a check again.
He looks around his upscale home. He could pawn something. But what to pawn? Certainly not wedding rings or his wife’s jewelry. Last time she got angry with him, she thrashed him within an inch of his life.
Maybe the big screen TV? It’s worth thousands. But what if he doesn’t budget right over the next 30 days? He’d lose the TV. Forget it. He looks around. The computer? No, he needs that. His son’s guitar? The kid doesn’t play much anymore. Nah, he’d never be able to look him in the eye if he pawned it. He’d pawn his tool kit, since he’s never used it. He hates getting his hands dirty. Yes. The tool kit! No, wait. It would only fetch a hundred bucks.
And then it hits him. The last resort.
A payday loan.
He throws on a hooded sweatshirt and dark sunglasses. He saunters into one of the very stores he’s trying to shut down. Ashamed, he hands over his pay stub and fills out the application. The young clerk diligently performs her work. Nervous, he makes casual conversation. He asks what she would do if there were no payday loan stores to have a job in.
“You mean, if that scumbag politican gets his way? I’m out a job, and I have a kid to feed. Where else am I going to get a job? We’re in a recession, you know”.
The Job Killer wipes the sweat from his brow. He wipes his equally sweaty palms on the sweatshirt.
His loan is approved for 25% of his gross income — $400. Just enough to fix the A/C. Cash in hand, he quickly makes a break for it, thankful that the local media hasn’t examined the issue closely enough to stake out a reporter.
He budgets properly and two weeks later, he returns to the store with $460. He pays $60 in fees, the same as the bounced check, yet he got $50 more in credit for it….and didn’t trigger a domino effect of bounced checks.
Then it dawns on him. Wow. Without a payday loan, I really would’ve been in the hurt box.
Maybe I’ve been wrong about this, he thinks. Instead of playing politics, I really should’ve considered all the people that would be hurt by this. Lots of my constituents need these loans. That gal in the store needs the job.
Maybe, he thinks, I should think of a bill that moves the product from being unregulated to regulated, but in a sensible way. Then I could still look like a hero, but not harm so many people.
The Job Killer hops on the bus and looks at all the people riding home from work. For the first time, he really sees them — regular Americans, struggling to make a living in a tough economy. Some of them have probably used payday loans because, like him, all the other choices just didn’t make sense.
He sits down in the one open seat. The bus roars to life and trundles down the street.
This Leo Ryan fellow, he thinks, was really onto something.