Democratic Lawmakers Say Payday Loan Background Does Matter

HARTFORD, CT — (Updated 4 p.m.) Democratic lawmakers who serve on the Banking Committee believe Republican gubernatorial nominee Bob Stefanowski’s tenure as CEO of a payday loan company should matter to voters, even if his former company is barred from selling its product in Connecticut.

Under the north portico of the state Capitol, Reps. Matt Lesser and Bobby Gibson, joined Senate Majority Leader Bob Duff and attorney Sarah Poriss Monday in explaining why voters should care about the three years Stefanowski spent with DFC Global, a payday loan company that made high interest loans to consumers in the United Kingdom and the United States. None of the loans were made in Connecticut, which bans the sale of payday loans.

Stefanowski’s campaign said he would do nothing to loosen Connecticut’s ban on the products.

“His time at DFC Global shows his willingness to dive headfirst into difficult situations in an attempt to reform and turn around troubled organizations,” Kendall Marr, a spokesman for Stefanowski’s campaign, said. “That is why he is the best person to lead our state and get Connecticut back on track.”

Stefanowski has said himself that he set out to change the industry with a predatory reputation. 

In November 2016, Stefanowski told a D.C. audience that everybody thought he was crazy to take the position at DFC Global, but “There’s a bunch of reasons I did it. The one I want to talk about today is that I truly believe there is a segment of the population that needs our product.”

He said there are people who can’t get bank accounts who need their product and the public sector has not found a solution to the problem.

“The problem with the industry is they got a little bit greedy and they took advantage of people when they didn’t necessarily have to,” Stefanowski said.

“I think we can create a company or we are already creating a company that treats people fairly, gives them a product that they desperately need, and provides a solution to this segment of the population that’s growing by the day.”

He said they created a product that’s term limited with a 60 percent interest rate.

But that was just as objectionable to Democratic lawmakers and a consumer attorney.

“This industry continues to try and find ways around our laws,” Lesser said.

He said it’s an “indefensible product” that traps consumers in debt and poverty.

Duff said this may not be the issue that brings somebody out to the polls on Election Day, but if it impacts themselves or their neighbors and their families they will understand why we’re standing out here today.

He said voters want politicians who will stand up to “these types of schemes.”

“The question is would you take one out?” Poriss said. “Then why would you want them to be accessible to any of your neighbors, friends, family members … why would you want these in your community?”

She said there’s nothing in a payday loan that is designed to help a consumer.

“They’re designed to fail,” Poriss said. “They’re designed to trap consumers, over and over into a lifetime of debt.”

Asked whether these products help a certain segment of the population, the resounding answer from the group was “no.”

Lesser said it goes to the difference in opinion about how you improve the middle class.

“Do we build the middle class by getting people a good education, raising wages, strengthening living conditions? Or do we do it by getting people more and more mired in debt. The idea that you can borrow your way out of poverty is just fundamentally wrong.”

Lesser said he’s afraid if Stefanowski becomes governor he will appoint a Banking Commissioner who is “sympathetic to Bob’s personal views, which are sympathetic to the idea that you can borrow your way out of poverty.”

Marr countered that “Bob would appoint a banking commissioner whose chief goal is to protect consumers who knows the banking industry inside and out.”

Before working as CEO of DFC Global, Stefanowski worked as CFO of UBS in London for three years, and before that he was chairman and managing partner at 3i Group PLC for three years, and prior to that he spent 13 years in various departments at General Electric.

After leaving DFC Global, Stefanowski filed the necessary paperwork to run for governor.

Since announcing last September he’s spent $3 million of his own money on the campaign. Most of it was used by the Madison resident to win a five-way Republican primary in August.

“As much as Democrats want to talk about anything but Connecticut’s fiscal crisis all you have to ask yourself who is going to lower taxes: a liberal Democrat from Greenwich or Bob Stefanowski?” Republican Party Chairman JR Romano said Monday.