One of Philly's local tv legends, Ron Burgundy Larry Kane, has his own blog and used it last Friday to question whether the local media is titling things in Tom Knox's favor by failing to give any mention to the part of Knox's career that includes high-interest, payday lending:
Sources tell us that other reporters have the goods, but have decided not to go with the story which deals with charges that Knox presided over predatory lending in Philadelphia, charges that have not yet been proven, or addressed. The question is - if the story is real, why are these publications holding off? The big “if” here is the question of whether the accusations ARE real. The names of the reporters will be withheld to protect my sources and the reporter’s reputations.
That got me wondering. If even I know about Knox and payday lending, where must I have learned about it? Did Knox include it in one of his many and ubiquitous television ads? Did one of his rivals bring it up at one of the many forums that I've attended? Was it on an episode of 24? I never miss that show.
The answer, of course, is no. I learned about it the same way everyone else already knows about it. From reading the newspaper, where responsible and hardworking journalists have been writing about it pretty much from the get go. And if they didn't feature it, they at least included references to it when covering other candidates.
So I plugged the word "payday" into thenextmayor.com search bar to see what I could find.
Click on continue reading to see the results.
Knox defends payday loans
This was an Inquirer story from February 11th. Unfortunately, when philly.com switched over its formatting, this was one of the articles that became no longer available. Anyone with Nexis/Lexis should be able to get it. And, it's a headline for chrissakes. So not only did they right about it but they put the words "payday loans" in the headline. Don't know how LK missed that one. The link may be dead, but some folks at phillyblog.com cut and pasted some of the text:
In 1999, all over Pennsylvania, thousands of people strapped for cash lined up at the storefront offices of a short-term loan company.
They got money, fast, from a bank called Crusader, headed by a self-made millionaire named Tom Knox.
The loans averaged $250 apiece. But the interest was so steep that community activists cried foul, and federal regulators zeroed in on the bank. Eighteen months after it began making these so-called payday loans, Crusader, under pressure from regulators, agreed to stop.
Now, the man who ran Crusader is running for mayor of Philadelphia, and his wealth has transformed the race.
...
But the longtime insurance executive also acknowledged that it was not one of his best business decisions - and said he "did the right thing" by getting out of payday lending.
Knox acknowledged that federal thrift regulators - "they're like Gestapo" - had pushed Crusader to stop this practice. He said the bank wanted out, having tired of criticisms from "social groups, do-gooder types" and federal regulators.
"They wanted us out of the business. We wanted to extricate ourselves," Knox said. "We got out."
At the time, he said, he thought the loans served working-class people well. "I thought at the time it was a service to the community," Knox said.
He said he did not realize at first that the loans, if unpaid and renewed again and again, could lead lower-income people into spiraling debt."
Group blasts Knox’s record on high interest, payday-lending
That one was all the way back on April 5th. The day before Larry wrote his blog post. It's a Dave Davies story from the Daily News. Funny, payday lending appears in that headline too.
In this story, headlined "A LONG WAY UP FOR KNOX," Davies provides a long profile of Knox that devotes an entire section to that part of his career:
When Knox returned to private business after the Fidelity Mutual incident, one of the projects that drew his attention was a sleepy savings-and-loan he'd bought years before called Crusader Bank.
He got busy with the bank, and handed his future mayoral rivals an issue: predatory lending.
It goes on from there.
John Baer, in a column called "Can this guy actually win?" from January 31st also mentions payday lending:
Look for knocks on Knox for past dabbling in payday lending, which can be cast as predatory (Knox says one of his companies was in it briefly but got out). Look for questions about his service to the city. Look, in other words, for the usual hardball politics.
I'm looking. And I'm finding. Just because the other campaigns haven't aired television ads highlighting this part of Knox's career (a risky move since he has the money to obliterate anyone who does), doesn't mean the issue hasn't been brought up.
When covering Bob Brady's announcement in a piece from January 26, Dave Davies explains a reference that Brady made to "predatory lending and foreclosures" by saying that it was "a phrase likely aimed at candidate Tom Knox, whose business resume includes high-interest payday lending."
Heck, as far back as November 2005, the Inquirer brought up payday lending in its earliest profile of Knox:
One opportunity Knox grasped in the late 1980s paid off big: He snapped up a small savings and loan, Crusader Savings Bank, and dramatically increased its income.
The bank was sold to Royal Bank in 2001, netting Knox, who owned just under half the stock, about $17.2 million, according to Securities and Exchange Commission documents.
But a big part of the bank's success was driven by short-term payday loans, which have high effective interest rates, and tax liens on homes, Knox said.
In April 2000, the federal Office of Thrift Supervision, which regulates S&Ls, entered a supervisory order against Crusader. It directed the bank to impose tighter management controls and expressed concerns about its subsidiary businesses, including the payday loans.
"They didn't like that we were making these small loans, said it was too much interest," Knox said.
The bank charged a flat $13 processing fee per $100 borrowed, which the Office of Thrift Supervision said amounted to about 400 percent yearly interest, Knox said. Though some consider payday loans exploitative, he defended them as fair, noting that the documentation requirements were the same as for much larger loans.
"We had people lined up around the block," Knox said, remembering the average payday loan as about $250. "If you're working and making $300 a week as your pay after tax and something happens - your kid gets sick and you have to take him to the doctor - what do you do?"
The federal enforcement action ended with the sale, which was conditioned on ending the payday-loan practice, the SEC documents said.
So why did I just go through this exercise? It's not like I'm bringing up anything the Knox people haven't already heard and answered to. I'm just not sure what Larry Kane is referring to when he says that other publications are "holding off" on this story.
The story has been out there since the beginning. Knox's people dealt with it, the newspapers dealt with it and everyone moved on. If the electorate doesn't seem to care, (and judging from Knox's spot near the top of the polls, they don't) then the newspapers can't make them care. It would be up to the other candidates to bring it up with their own television ads. I have a feeling that if they do, it'll be with a last minute barrage in the week before the primary so Knox's camp has very little time to respond.
Anyway, I've got a lot of respect for Larry but it seems like he's seeing what he wants to see when it comes to the newspaper's coverage of Knox and not what's really out there.
Comments (6)
I've got another exclusive for you Larry....sources tell me that Dwight Evans used to have a mustache. Get on it.
Posted by JC | April 13, 2007 6:57 PM
Ask yourself a question, do you like John Street?
If the answer is no, then why on earth would you support Bob Brady??
Brady LIED to every Philadelphian, simply to ensure Street got re-elected.
Posted by Anonymous | April 14, 2007 10:00 AM
Anybody who does not like John Street should not consider voting for
-Bob Brady
-Chaka Fattah
-Dwight Evans
If you look at any of the proposals put forth these candidates you will see that they are just continuing the work of the Street administration.
If you want something to be different than Nutter and Knox are the only candidates talking change.
Posted by newday | April 14, 2007 10:49 AM
How uninformed some folks are: If you like what John Street has done in the past 8 years then, you have just two (2) choices:
Tommy kNOx
Chaka Fattah
They come with the blessings and encouragement of the man who gave you John Street:
Fast Eddie Rendell
Get from behind the computer, get involved and become seasoned...
Posted by eddie | April 14, 2007 2:59 PM
Nutter is the only anti-Street candidate. If you lived in Philadelphia you'd know this. Who proposed the ethics bill in Philadelphia and got it passed? Who opposed Street time after time?
The answer, Nutter.
Fatah is in the race so Street can continue his political career in Congress. Is this what you want to happen?
Posted by Keith Newman | April 15, 2007 8:37 AM
I think that Nutter is the best person to run the City after that criminal Street get the hell out of office. I said it before and I'm going to say it again that Street and Fattah cut a deal that Fattah be Mayor and Street take over his position as Congressman. Also, Brady's deal if he loses in his bid to be Mayor then, Lynn the DA will take her shot in the general election. But if he wins she will have a high profile job in his administration to be groomed to take over later. The voters should not vote for in the next election all the people who now hold offices running to be Mayor since they are so unhappy with their current postions.
Posted by Lamont w Thomas | April 16, 2007 12:45 PM