A Kansas City-based nonprofit has donated more than $1 million to a political committee whose sole purpose is to oppose tougher restrictions on short-term lending, such as payday or car title loans.
The political committee is called Missourians for Equal Credit Opportunity, and it was established to fight a proposed ballot measure that would cap the annual interest rates on short-term loans at 36 percent. Over the last eight months, the nonprofit group Missourians for Responsible Government has donated $1.1 million to the effort.
However, because its is a nonprofit, Missourians for Responsible Government is not required to disclose where that money came from.
Advocates for the ballot measure contend that payday lender are bankrolling the campaign, although a spokesman for Missourians for Equal Credit Opportunity refused to say if where the group's money is coming from when asked by a Kansas City Fox-TV affiliate.
But paperwork filed Wednesday by Overland Park-based payday loan company QC Holdings Inc. could offer the first clue.
The company, which operates primarily under the Quik Cash name, said in an annual filing with the U.S. Securities and Exchange Commission that it had "already spent substantial amounts opposing the efforts to place this initiative on the ballot."
"If the initiative obtains the required signatures and otherwise meets the legal requirements to place the initiative on the Missouri ballot for November 2012, we will spend substantial additional amounts to defeat the proposal," the company said in its filing.
If the Missouri ballot initiative passes, QC Holdings says it would be forced to cease payday lending operations in Missouri. In 2011, Missouri accounted for approximately 23 percent of the company's revenues and 35 percent of its gross profit.
The company said it spent $1.8 million in 2008 related to ballot initiatives.
Sean Soendker Nicholson, executive director of the liberal advocacy group Progress Missouri, said the filing just confirms what most already knew, that "payday lenders are going to spend big bucks to protect their 400 percent interest rates and keep Missouri's laws as lax as possible."
