It’s not just how prostitution works, but politics as well: Throw enough cash at someone and they’ll do just about anything.

Such has been the case in the General Assembly as payday lenders have been able to funnel enough money into the coffers of the right politicians to seemingly block any meaningful reform of their controversial industry. 

“We’ll never know [how much money the industry spent],” says Sue Berkowitz, director of the Columbia-based South Carolina Appleseed Legal Justice Center, a private nonprofit dedicated to fighting for low-income consumers.

It wasn’t long ago that some state lawmakers wanted to ban legal loan sharking altogether. In February 2008, a Senate proposal to ban the industry fell just three votes shy of passing.

But when a bill to regulate the practice of short-term loans landed in a subcommittee during that same legislative session, it turned out that nearly every member of the panel had taken money from the industry.

Once it was stuffed with amendments favorable to the industry, the bill sailed through the House Banking and Consumer Affairs Subcommittee, then chaired by Rep. Nikki Haley, a Lexington Republican who had taken $1,750 from payday lenders. Days later, Greenville Republican Rep. Harry Cato, then chairman of the House Labor Commerce and Industry Committee, killed the bill before the session ended. Cato had accepted more than $15,000 from the industry through his political action committee.

This year, a bill critics say is generous to the industry has passed the same subcommittee and committee. Now, a two-year legislative war over whether to effectively regulate the business is headed for another bloody battle on the floor of the House this week.

Pushed out of North Carolina and Georgia, and under attack in several other states as well, the industry has hired big-time Columbia lobbyists from both political parties. Also, for the past week, former Democratic gubernatorial candidate and state Sen. Tommy Moore, who works for a payday lending trade group near Washington, D.C., has been in town working his former colleagues. 

Rep. Alan Clemmons, R-Horry, calls the payday lending business “financial slavery” and says the bill set for debate on the House floor is “favorable to a continuation of the status quo for the industry.”

John Ruoff, research director of the nonprofit South Carolina Fair Share, has studied payday lenders in the state for several years. They purposefully trap low-income borrowers in a cycle of debt and rack up enormous fees while doing so, Ruoff says.

The lenders say they are merely meeting a need for short-term credit that mainstream financial institutions do not provide.

Berkowitz says the new bill would create a statewide database to make sure people can only take out one loan at a time. While that is a positive step, she says, lawmakers also doubled from $300 to $600 the amount a consumer could borrow. “The industry worked very, very hard,” she says.

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