Title-loan companies pull the poor ever deeper into debt with titanic fees and interest blessed by the state

When Mary Kinnaird and her husband split up, it wasn't just her marriage that hit the rocks.

She quickly found herself sinking in debt, reaching desperately for anything to stay afloat. But what looked at first like a life preserver turned out to be an anchor, pulling her deeper into poverty.

The Sanford woman became a victim of one of the latest gimmicks in separating people from their money - the title loan, in which borrowers pledge their cars and pay triple-digit interest in return for fast cash.

Mary Kinnaird knew that a bank wouldn't help her. She was broke, her credit a mess, and the only thing of value she owned was a 1986 Camaro. The car, she began to think, was her lifeline.

At a small, title-loan store in Sanford, she plunked down the title to the $3,600 Camaro and got $250 she needed to pay bills and contribute to the cost of her daughter's wedding. She agreed to pay it back, plus $54 interest and fees, in one month.

Sure, the 22-percent-a-month rate was high - it added up to 264 percent a year - but she felt that she had no choice. Besides, she was expecting an income-tax refund by the time the loan was due.

The refund didn't come in time. She found herself fighting month after month just to keep her head above water. It took a year to save her car from being repossessed - and she wound up paying back more than twice the amount she borrowed.

This may be hard to believe, but Ms. Kinnaird was lucky. Many people who get themselves entangled in title loans end up missing a payment and losing their cars. Outrageously, lenders often demand to keep a spare set of keys, just in case.

If it seems like loan-sharking, that's because it is. And it should be illegal.

As recently as 1993, the Legislature had outlawed the title-loan business, despite the influ-ence of well-monied lobbyists. Just one year later, though, the industry pushed through a bill to make them legit again. Fortunately, the late Gov. Lawton Chiles vetoed their brazen attempt.

But, the industry didn't give up. In 1995, it tried again, using Donald Tucker, former speaker of the Florida House of Representatives, as its main lobbyist. Mr. Tucker, with his buddies in the Legislature, managed to take advantage of the notoriously chaotic closing days of the session, slipping through an amendment to legalize title loans. And there was something in there about a 22 percent rate.

Some lawmakers - who now express shock and embarrassment at results of the hurried vote - say they mistakenly believed that they were supporting a rate of 22 percent a year. It turned out to be 22 percent a month - 264 percent a year.

Can you say "price-gouging''?

It's no coincidence that the title-loan industry now makes about a half-million loans every year in Florida. Were it a bank, it would be the 160th largest in the state.

And the more it makes, the bigger the pile of money it funnels to campaign contributions to protect its interests - $168,000 in 1997-98 alone. Title Loans of America, the industry heavyweight, was most generous, handing out nearly $80,000 to its favorite politicians.

Shamefully, the money seems to have had its intended effect: Legislators have built a brick wall around their 1995 mistake, repelling every attempt at correction. Last year, the House voted to put strict controls on the industry, but then senators said, oh, no, what's wrong with triple-digit interest rates?

This year, state Rep. Bill Sublette and state Sen. Kendrick Meek - again - tried to stop the outrage. They have pushed to cut the maximum that title-loan companies can charge from what amounts to an absurd 264 percent a year in interest to 30 percent a year.

That's still high, but it's a whole lot better. But guess what: Senators have decided that it is more important to protect the loan-sharks than the poor. Already, a Senate committee has discarded Mr. Meek's bill in favor of one filed by Sen. W.D. Childers and touted, laughably, as reform. It would allow title-loan companies to charge an interest rate of 96 percent a year.

Ouch. Thus far, Senate President Toni Jennings, who promised to ensure a fair hearing for title-loan reform, has done nothing to stop the outrage. She has been sitting by quietly, letting it happen. In the House, the situation is no better. In a thinly veiled attempt to bury reform, Speaker John Thrasher has assigned the bill to five committees - an almost-certain kiss of death. If one committee won't kill it, then another one will.

So, as expected, the first committees to hear Mr. Sublette's bill shoved it aside.

But, then, what did Mr. Sublette do?

Seeing his bill lose steam, he rolled over, proposing to allow 8 percent interest a month - lower at first than Mr. Childers' industry-backed bill but amounting to the same outrageous 96 percent a year.

Is there no backbone anywhere in this mess?

To no one's surprise, the 96-percent-a-year plan passed - along with an amendment to tie the hands of local communities that might want to lower those rates.

Amazingly, Ms. Jennings and Mr. Thrasher are talking about running for the U.S. Senate while letting Florida's poor be victimized by big-time campaign contributors.

If the title-loan companies are feeling any pain, it probably is a little indigestion from wining and dining the politicians - or perhaps back strain from the weight of lugging around all that cash.