FOR IMMEDIATE RELEASE
Contact: Phyllis Salowe-Kaye | Phyllis@njcitizenaction.org | (973) 220-3823
Veronica Lavarro | Veronica@njcitizenaction.org | (201) 988-5260
STATEMENT ON NJ STATE INVESTMENT COUNCIL’S FAILURE TO CONCLUDE DIVESTING STATE PENSION FUNDS FROM ILLEGAL PAYDAY LENDER
By Phyllis Salowe-Kaye, Executive Director, New Jersey Citizen Action
(Trenton, NJ)– Today, New Jersey Citizen Action (NJCA) expressed great disappointment over the New Jersey State Investment Council’s (NJSIC) failure to formally divest New Jersey pension funds from JLL Partners, which used $50 million of pension funds to purchase the second largest predatory payday lender in the nation, ACE Cash Express. Back in September, NJSIC indicated that they would complete divesting by its November meeting. ACE was fined $10 million in 2014 by the Consumer Financial Protection Bureau (CFPB) for its predatory lending and illegal debt collection practices.
“The State Investment Council’s failure to divest state pension funds from an illegal payday lender is extremely disappointing and shows a lack of commitment to correct an issue that they publicly acknowledged as a bad situation. With more than enough time to divest, the Council has again failed,” said Phyllis Salowe-Kaye, Executive Director of NJCA. “This sends a message to the entire predatory payday lending industry that while their business is illegal to operate in the state, they can continue to enrich their morally reprehensible business practices on the backs of New Jerseyans.”
“We urge the Council to immediately divest from JLL Partners and ACE Cash, and institute strong due diligence policies to prevent a situation like this from happening again. This problem has been festering for almost a decade, when the Council made its first investment in 2006, and allowed pension funds to purchase an illegal payday lender. We should not and cannot continue to let our state pension funds to be invested in the payday lending industry for even a single day longer.”
The NAACP joins NJCA in expressing their frustration over the protracted timeframe it is taking the State Investment Council to conclude divesting the state pension funds. “The NAACP is concerned about the least among us, impacted by this type of investment that supports illegal industries like payday loan companies that dramatically impact the poor,” said Bruce Davis, Economic Development Committee Chair of the New Jersey State Conference-NAACP. “We hope in the future that the Council will institute policies that prevent the repeat of this practice.”
Payday lending is illegal in New Jersey due to high annual interest rates which can be as high as 1400%, as in the case of ACE and which greatly exceed the state’s 30% usury cap. 12 million American borrowers are lured into payday loans, spending more than $7 billion on payday loans each year. Nearly a quarter of them get trapped into an endless cycle of debt. Payday lenders, known to target minorities, military personnel and low income consumers are still able to market to New Jersey consumers via the internet. New Jersey taxpayers and pension holders became indirect owners of ACE through an investment with JLL Partners in 2006.
New Jersey Citizen Action is a statewide progressive advocacy fighting for social and economic justice. We put progressive values into action.