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Speaker Tillis’ Agenda Has Failed NC Veterans

GREENSBORO – As Speaker Tillis continues to focus on politics rather than solutions for North Carolina’s veterans, he needs to answer for his actions in Raleigh that have directly harmed thousands of North Carolina veterans and military families.

Speaker Tillis has shown he is wrong for veterans and military families when it comes to financial security, healthcare, and their economic livelihoods.

Speaker Tillis Pushed Efforts To Benefit The Predatory Lending Industry In North Carolina. Kay helped to end payday lending in North Carolina when she was in the state Senate. Unfortunately, Speaker Tillis has pushed efforts to increase predatory loans. In 2011, the legislature attempted to pass a bill that was so strongly opposed by military leaders that a representative of Secretary of Defense Robert Gates testified against it because he feared how it would hurt servicemembers. The Fayetteville Observer even editorialized that “North Carolina relinquished its claim on being the most military-friendly state in the nation” after the measure passed the North Carolina House under Speaker Tillis’ watch. While that bill didn’t become law, last year a similar measure to allow predatory lenders to raise rates and loan limits did.

Speaker Tillis Ended The Earned Income Tax Credit. In the tax plan that Speaker Tillis spends so much time touting, he ended the Earned Income Tax Credit that 64,000 military families previously benefitted from. But don’t expect to hear Speaker Tillis brag about that accomplishment anytime soon.

Speaker Tillis Rejected Healthcare For 23,000 North Carolina Veterans.  When it comes to healthcare, Speaker Tillis has put political games ahead of what’s right for North Carolina’s veterans. Speaker Tillis boasts about his efforts to block the Medicaid expansion that would have covered 500,000 North Carolinians. Among those 500,000? 23,000 North Carolina veterans who could be eligible for Medicaid.

Speaker Tillis Thinks It’s A “Dangerous Idea” To Raise The Minimum Wage For 46,000 Veterans.  And it’s not just his record in Raleigh that hurts veterans; he promises more damaging consequences if he has the chance to go to Washington. Speaker Tillis said raising the minimum wage is a “dangerous idea” and even goes so far as to say we don’t need a federal minimum wage. That’s bad news for the 46,000 North Carolina veterans who would benefit from an increase in the minimum wage.

“Kay is taking real action for North Carolina veterans – working to reduce the claims backlog, pressing the Administration to expedite approval of new clinics, and support economic policies to create an economy that works for everyone – but Speaker Tillis has a record of pushing policies that are damaging for North Carolina’s veterans and military families. It’s clear from his record that Speaker Tillis just isn’t willing to put the needs of North Carolina’s veterans first,” said Sadie Weiner, Hagan Campaign Communications Director.

BACKGROUND

SPEAKER TILLIS HAS PUSHED EFFORTS TO BENEFIT THE PREDATORY LENDING INDUSTRY IN NORTH CAROLINA

2011: TILLIS’ HOUSE PASSED A BILL TO ALLOW PREDATORY LENDERS TO HIKE INTEREST RATES, WHICH WAS VEHEMENTLY OPPOSED BY MILITARY LEADERS INCLUDING DEFENSE SECRETARY GATES…

2011: The Tillis-Led House Passed A Bill Allowing Predatory Lenders To Increase Costs For Small Loans That Were Often Used By Military Service Members.  “Military leaders joined lawmakers and consumer advocates today to speak out against a proposal to allow lenders to raise the cost of small loans. The bill, H810, would allow consumer lenders to charge higher interest on larger loans. Under current law, lenders can charge 36% interest on the first $600 loaned.  H810 would raise that ceiling to $1500. It would also make it easier for borrowers to ‘roll over’ old loans into new debt, the same model used by the payday lenders state lawmakers banned several years ago. Lenders say it’s been more than two decades since they’ve been allowed to raise their rates, and they’re having trouble keeping up with the rising costs of doing business.  But a study by the NC Commissioner of Banks said the industry is making enough profit at its current rates. The military has taken a special interest in the bill because servicemembers are a favored demographic for lenders making small, unsecured loans at high rates. The industry’s critics complain those lenders cluster near the gates of bases, often using flags and military-sounding names to make them seem legitimate or even sanctioned.” [WRAL, 6/1/11; H810, filed 4/6/11]

  • The Loan Bill Would Allow Companies To Lend Up To $15,000 Compared To The Current $10,000, And Charge Up To 36 Percent Interest On Unpaid Balances Up To $1,500, Compared To The Current $600. “The bill would allow companies lend up to $15,000, compared to the current $10,000. They also could charge up to 36 percent interest on unpaid balances up to $1,500, compared to the current $600. Because the loans charge varied rates for different amounts borrowed, consumer advocates say overall annual percentage rates on the loans can top 50 percent. Opponents said the higher rates didn’t make quick cash more available to people in a pinch, and merely allowed profitable companies to charge more.” [Associated Press, 6/3/11]

  • Tillis “Helped Push” The Loan Bill Through The House. “Blanton is the chief executive of Time Investment Corp., a Greenville consumer lending company that would benefit from legislation Tillis helped push through the House last year.House Bill 810, which sits in a Senate committee, would allow small lenders to charge higher rates and fees.Blanton and other lenders gave.” [WRAL, 2/28/12]

The Loan Bill Was “Opposed By The Pentagon, Commanders At The State’s Three Largest Military Bases, The AARP And Consumer Advocacy Groups.” “North Carolina Storefront lenders who sought for years to raise borrowing costs on small consumer finance loans won a victory Thursday as the House passed a measure opposed by the Pentagon, commanders at the state’s three largest military bases, the AARP and consumer advocacy groups. The unusual public opposition came from military leaders who worried the higher costs would plunge young service members deeper into debt. They faced counter-arguments that the lenders provided modest earners with cash that loan sharks might otherwise provide. The 61-54 result saw about a dozen majority Republicans cast votes against the bill, splitting from party colleagues who wanted to see it advance. Several Republicans voting no came from areas near military bases swayed by word of opposition from Defense Secretary Robert Gates’ office and military brass at the Army’s Fort Bragg, Camp Lejeune Marine Corps Base, and Seymour Johnson Air Force Base.” [Associated Press, 6/3/11]

  • WRAL Headline: “Military Leaders Speak Out Against Loan Bill.” [WRAL, 6/1/11]

Defense Secretary Gates Opposed The Loan Bill So Strongly A Representative Testified Against The Measure On His Behalf. “The military has taken a special interest in the bill because servicemembers are a favored demographic for lenders making small, unsecured loans at high rates. The industry’s critics complain those lenders cluster near the gates of bases, often using flags and military-sounding names to make them seem legitimate or even sanctioned.Mike Archer directs legal services for Marine Corps families on the East Coast. He appeared today on behalf of the Department of Defense and Defense Secretary William Gates.” [WRAL, 6/1/11]

  • Representative Of Defense Secretary Gates: “The Secretary Is Opposed To House Bill 810 […] These Industries Tend To Target Servicemembers. They Find 57,000 Servicemembers All In One Place, Many Of Them Very Young, Very Unsophisticated, To Be An Irresistible Target.” “Mike Archer directs legal services for Marine Corps families on the East Coast. He appeared today on behalf of the Department of Defense and Defense Secretary William Gates. ‘Let me make something perfectly clear: the Secretary is opposed to House Bill 810 in its original form. And the Secretary is opposed to the amended House bill.’ Archer said the Department of Defense generally doesn’t seek to intervene in state legislative matters, but did in this case because the measure would adversely and disproportionately affect servicemembers.‘These industries tend to target servicemembers,’ Archer explained.  ‘They find 57,000 servicemembers all in one place, many of them very young, very unsophisticated, to be an irresistible target.’” [WRAL,6/1/11; Vote 701, (Tillis- NV), HB 810, 6/2/11]

  • Representative Of Defense Secretary Gates Said Stress And Separation From Family And Friends Can Be Reasons Servicemembers Tend To Get Into Trouble With Predatory Loans, But The Resulting Financial Problems Become Another Source Of Stress For The Soldier. “Mike Archer directs legal services for Marine Corps families on the East Coast. He appeared today on behalf of the Department of Defense and Defense Secretary William Gates. […] Archer says inexperience, stress, separation from family and friends, and marital problems caused by deployment are among the reasons servicemembers tend to get into trouble with easy, high-cost loans.  The resulting financial problems become yet another source of stress for the soldier-borrower. Archer also said credit problems can cause a servicemember to lose security clearance, and training a replacement costs the military money.” [WRAL, 6/1/11]

  • The Pentagon Took “The Unusual Step Of Opposing State Legislation” Because They “Fear That Higher-Cost Consumer Loans Would Hurt Troop Readiness.” “The state’s military brass is aiming at state legislation to allow consumer finance companies to charge more for small, unsecured loans often obtained by troops in uniform. A Fort Bragg colonel and a Camp Lejeune lawyer said the Pentagon is taking the unusual step of opposing state legislation because of the fear that higher-cost consumer loans would hurt troop readiness. The top legal aid lawyer for Marine Corps bases on the East Coast says Defense Secretary Robert Gates’ office opposed against the legislation. Fort Bragg Col. Mike Whetston says consumer finance companies target young, financially unsophisticated troops. Lenders say state rules unchanged since the 1980s have not kept up with their business costs.” [Associated Press, 6/1/11]

  • WRAL: “Many Were Mystified By The Bill’s Passage In The House, Especially After Then-Defense Secretary Robert Gates Asked Lawmakers Not To Pass It Because It Would Hurt Service Members Who Use Consumer Lenders.” [WRAL, 2/28/12]

Fayetteville Observer Editorial: After Tillis’ House Passed Measure Allowing Predatory Lenders To Increase Rates On Loans That Targeted Military Families. “That’s how North Carolina relinquished its claim on being the most military-friendly state in the nation. It officially abdicated on Thursday, when the House voted, 61-54, to allow consumer lenders to boost their already sky-high interest rates. They did it despite pleas from Army and Marine Corps leaders to reject the bill. Military opposition to state legislation is unusual in North Carolina, but the consumer-finance bill drew fire everywhere from individual garrison commanders up to the secretary of defense. The military objected because young soldiers and Marines often fall into deep financial trouble after turning to the easy-to-get high-interest loans. The legislation also drew outspoken opposition from AARP, the National Association for the Advancement of Colored People and the N.C. Association of Credit Counselors. The state’s banking commissioner has said that the consumer-loan industry is already profitable. It should be, with interest rates of 36 percent on top of hefty loan-application fees. But the Army and Marines don’t make big campaign contributions. The loan industry does. After the middle of August last year, when it became clear that a Republican landslide was in the making, finance company donors and their PACs stopped giving to Democrats and funneled their funding to Republicans — more than $100,000 in all. In the 2009-2010 election cycle, state Sen. Phil Berger — now president pro tem of the Senate — was the top benefactor of consumer-finance funding. He got $18,250. House Speaker Thom Tillis got $13,250 in that cycle and House Majority Leader Paul Stam got $13,950.” [Editorial, Fayetteville Observer, 6/5/11]

…AND TILLIS WAS ACCUSED OF CATERING TO SPECIAL INTERESTS BY PUSHING THROUGH THE LOAN BILL AFTER RAISING TENS OF THOUSANDS FROM THE PREDATORY LENDING INDUSTRY

Raleigh News & Observer Headline: “Group Says Tillis Pushed Bill For Donors.” [Raleigh News & Observer, 3/1/12]

Democracy NC: “Amended Report from Speaker Thom Tillis Reveals Large Donations from Industry He Helped.”[Democracy NC, 2/28/12]

Democracy NC: From 2010 – 2011 Tillis Received $35,012 From Donors Affiliated With Predatory Lenders, Making Him The General Assembly’s Top Recipient, Even Though During The Previous Four Year He Hadn’t Raised Any Money From These Donors. “The top three recipients of the consumer finance industry’s contributions in 2010 were Sen. Phil Berger, now Senate President Pro Tem ($18,250); Rep. Paul Stam, now House Majority Leader ($13,950); and Rep. Thom Tillis, now House Speaker ($13,250). However, a review by Democracy North Carolina shows that, thanks to the Greenville fundraising event last October, Tillis now ranks first among recipients of the industry’s money. He received a total of $35,012 for the two years, 2010-2011 from two PACs and more than 30 individuals affiliated with consumer loan financing. In his previous four years of campaigning, from 2006 through 2009, Tillis received nothing from these donors. (He got a $500 donation in 2007 from HSBC Finance Corporation’s PAC; the HSBC PAC is now closed.).” [Democracy NC, 2/28/12]

2013: TILLIS PASSED A BILL INTO LAW ALLOWING PREDATORY LENDERS TO HIKE INTEREST RATES, AND DAYS LATER A LENDER WHO RAN A LOBBYING CAMPAIGN FOR THE BILL HOSTED A FUNDRAISER FOR TILLIS’ U.S. SENATE CAMPAIGN

Predatory Lenders Spent More Than $1.8 Million On A Widespread Lobbying Campaign To Pass Legislation To Raise The Maximum Interest Rate They Can Charge. “Records show a group of consumer finance providers spent more than $1.8 million to hire at least 20 lobbyists and steer campaign contributions to North Carolina lawmakers to win passage of a bill raising the maximum interest rates they can charge borrowers. After sailing through the Republican-controlled General Assembly earlier this month, the bill now awaits the expected signature of Gov. Pat McCrory. Critics of the measure, including Attorney General Roy Cooper, say the fee increases and sky-high interest rates allowed by the bill will trap vulnerable low-income borrowers in a harmful cycle of taking on more debt just to cover the payments on prior loans.” [Associated Press, 6/13/13]

  • The Loan Bill Increased The Cap On Unsecured Loans To $15,000, And Raised The Interest Rate To 30% For The First $4,000 Borrowed. “A handful of Democrats also voted for the bill, which increases the cap on the unsecured loans to $15,000, up from $10,000. Interest rates for the loans will increase to 30-percent interest for the first $4,000 borrowed, 24 percent for the next $4,000 and 18 percent for the remainder of the principal. The bill also increases fees the lenders can charge. Records show that since 2010 the industry used two political action committees and individual donations from company executives and their family members to send more than $300,000 to the campaigns of key politicians. The bulk of the money went to Republicans, including Gov. McCrory, House Speaker Thom Tillis and Senate leader Phil Berger.” [Associated Press, 6/13/13]

  • The Predatory Lenders’ Bill “Sailed Through The Legislature” With Tillis’ Support. “The Associated Press reported earlier this month that consumer finance and payday lenders spent at least $1.8 million since 2010 to hire 20 lobbyists and steer at least $300,000 campaign contributions to North Carolina lawmakers, with the bulk of the money going to influential Republicans. Tillis’ state campaign got more than $30,000 of that money, records show. With the speaker’s support, the industry’s bill sailed through the legislature. It was signed into law June 19 by Gov. Pat McCrory, a Republican whose campaign also got money from the industry.” [Associated Press,6/25/13]

Tillis Held A Fundraiser Co-Hosted By Royce Everette Of Time Investment Corp. – Who “Helped Direct” The $1.8 Million Lobbying Campaign For Predatory Lenders – Days After The State Passed A Bill Hiking Profits For The Industry. “The man who helped direct a $1.8 million political and lobbying effort for consumer finance lenders is co-hosting a fundraiser for North Carolina House Speaker Thom Tillis’ fledgling U.S. Senate campaign, less than a week after a bill hiking profits for the industry became state law. Tillis was expected to be in Greenville Tuesday for a luncheon co-hosted by Time Investment Corp. president Royce Everette, who owns 19 consumer finance offices across the state. Everette is also the chairman of legislative affairs for the Resident Lenders of North Carolina, an industry group that championed passage of a bill raising interest rates and fees on the consumer finance loans marketed to low-income borrowers. Everette’s wife, Bonnie, and his mother, Gail Blanton, are also listed as hosts for the event held at the home of Parker Overton, the founder of a chain of watersports stores.” [Associated Press,6/25/13]

  • Associated Press Headline: “Lender Hosts Tillis Event Days After Bill Passes.” [Associated Press,6/25/13]

  • Royce Everette “Said Their Lobbyists Played A Critical Role In Presenting The Industry’s Narrative To Lawmakers.” “Everette said their lobbyists played a critical role in presenting the industry’s narrative to lawmakers _ that the old regulations were cutting into profits and hindering their ability to compete with out-of-state companies offering similar loans over the Internet. ‘It was our lobbyists that went and sat down and talked to them,’ Everette said of the lawmakers. ‘I think we’re very fortunate. Through our efforts with lobbyists and talking with people about the industry, we have developed relationships with people on both sides of the aisle.’” [Associated Press, 6/13/13]

  • Royce Everette: “It Was Our Lobbyists That Went And Sat Down And Talked To [Lawmakers].” [Associated Press,6/13/13]

  • Royce Everette: “Thom Tillis Is A Good Person. Did He Help Us? Yes. So I Support Him […] I’m Going To Write Him A Check.” “Everette denied his financial support of Tuesday’s fundraiser was payback for passage of the industry’s bill. He has supported candidates from both parties over the years, he said. ‘If you have a person who you think is a good person you try to support them,’ Everette said. ‘That’s the way it goes. Thom Tillis is a good person. Did he help us? Yes. So I support him.’ Records show Everette has donated at least $74,000 to state campaigns since 2010, including $11,000 to Tillis. His mother, who is the CEO of Time Investment, gave at least another $40,000, including $7,500 to Tillis. Everette said he didn’t know how much more he would donate to Tillis’ U.S. Senate campaign. ‘I’ve been to a number of his fundraisers over the years,’ he said. ‘I’m going to write him a check.’” [Associated Press, 6/25/13]

SPEAKER TILLIS ENDED THE EARNED INCOME TAX CREDIT WHICH BENEFITTED 64,000 MILITARY FAMILIES

Tillis’ Tax Plan Eliminated The State Earned Income Tax Credit, Which Benefitted Nearly 64,000 Military Families. “Here are key reasons why maintaining the state EITC is important for North Carolina’s soldiers, veterans, and their families: Almost 64,000 military families benefit from the EITC. For nearly 64,000 low-income military families in 2011, the EITC ensures that enlisted men and women can meet the basic needs of their families.” [North Carolina Budget & Tax Center, 64,000 North Carolina Military Families Set to Lose EITC, Experience Tax Increase, July 2013]

Charlotte Observer Editorial: “64,000 Veteran And Active-Duty Military Families In North Carolina Would Be Affected By The N.C. Legislature’s Tax Plans, Which Allow The State’s EITC To Expire.” “In fact, the groups said about 64,000 veteran and active-duty military families in North Carolina would be affected by the N.C. legislature’s tax plans, which allow the state’s EITC to expire. And many of these military families, as well as other low-wage N.C. workers, will get little or no benefit from the state’s other tax cut proposals because they don’t make enough to pay any income taxes. They will however see a boost in how much they pay in sales taxes.” [Charlotte Observer Editorial, 7/14/13]

Charlotte Observer Editorial: “Many Of These Military Families […] Will Get Little Or No Benefit From The State’s Other Tax Cut Proposals Because They Don’t Make Enough To Pay Any Income Taxes. They Will However See A Boost In How Much They Pay In Sales Taxes.” [Charlotte Observer Editorial, 7/14/13]

SPEAKER TILLIS REJECTED HEALTHCARE FOR 23,000 NORTH CAROLINA VETERANS

Tillis Blocked Expanded Medicaid In North Carolina, Which Would Have Covered 500,000 North Carolinians. “Gov. Pat McCrory signed legislation Wednesday that rejects major components of the federal health care law, denying about 500,000 low-income people health care coverage under an expanded Medicaid program. The measure also prevents North Carolina from establishing a state-sponsored marketplace for health insurance, giving the control to the federal government, which will begin selling policies on the exchange in October.” [Charlotte Observer, 3/7/13; S.B. 4; voted 69 (Tillis – Y),2/26/13; became law,3/6/13]

Pew Charitable Trust: In North Carolina, 23,300 Veterans Could Be Eligible For Expanded Medicaid. [Pew Charitable Trusts, 5/27/13]

SPEAKER TILLIS THINKS IT’S A “DANGEROUS IDEA” TO RAISE THE MINIMUM WAGE FOR 46,000 VETERANS

Tillis Called A Minimum Wage Increase “Dangerous Idea.” TILLIS: “I have, I have serious concerns with the discussion around minimum wage because it drives up costs and it could harm jobs.  Obviously we want people to be paid a wage that can help make ends meet, but when you increase artificially the cost of labor to do a job, then oftentimes those jobs will just go away, and I think this is, at least what’s been proposed in Washington, is a dangerous idea.” […] REPORTER: “Speaker Tillis, getting back to the minimum wage issue, what do you consider a living wage?” TILLIS: “I think, for the most part, the market needs to define that.  I think when we create artificial thresholds, then you run into a big problem.” […] REPORTER: “If the market should drive it, should we get rid of the current minimum wage?” TILLIS: “I’m sorry, say that again?” REPORTER: “If the market should drive the minimum wage decision about how much people should make, should we get rid of the current minimum wage?” TILLIS:  “Yeah, I’m…I think you should consider anything that frees up the market to create more jobs, but the reality is that you can’t unring that bell.” [Tillis Filing Remarks, 2/26/14]

  • Tillis Said “If” There’s Going Be A Minimum Wage It Should Be Decided By The States, And Said The Federal Government “Doesn’t Need To Tell The Nation What The Minimum Wage Needs To Be.” TILLIS: “If there’s going to be a minimum wage it’s a decision that needs to be made by the states, not the federal government. It’s another regulatory overreach, it’s another disruption […] This will harm the economy, and Barack Obama and Kay Hagan doesn’t need to tell the nation what the minimum wage needs to be.” [Time Warner Cable GOP Debate, 4/22/14]

In North Carolina, 46,199 Veterans Would Benefit From Raising The Minimum Wage To $10.10. [DPCC Calculations based on EPI, 4/24/14]

Economic Policy Institute: Nationwide, Over A Million Veterans Would Benefit From An Increase In The Minimum Wage. “After serving our country, many of our nation’s veterans come home to low-wage jobs. In fact, of the more than 9 million veterans in the workforce today, over a million would see their wages go up if Congress were to pass the Fair Minimum Wage Act of 2012.” [Economic Policy Institute, 11/13/12]