Stefanowski, Lamont take liberties in payday loan allegations
Republican Bob Stefanowski ran a payday lending company. The venture capital firm that employed Democrat Ned Lamont’s wife as managing director invested in one. Both are facts featured in misleading television ads in Connecticut’s gubernatorial campaign.
In his newest ad, Stefanowski reacts to a Lamont spot in which the Democrat asserts, “Bob Stefanowski profited from predatory loans to service members.”
Not so, says Stefanowski. His ad claims, “What a hypocrite! Lamont’s the one who personally profited off payday loans.”
Both assertions are problematic.
It is true that Stefanowski’s last job in the private sector was chief executive officer of DFC Global, whose checkered record includes allegations of fraudulent auto loans to U.S. military personnel. Stefanowski ran the company from June 2014 until January 2017.
DFC resolved claims arising from the auto loans in mid-2013, a year before Stefanowski arrived. It made $3.3 million in refunds as part of a settlement with the Consumer Financial Protection Bureau. It discontinued its auto business on Stefanowski’s watch in 2015.
The ethics of Stefanowski’s tenure at DFC raise more nuanced questions. He recruited outsiders to improve the company’s business practices and loan products. The company also continued to make high-interest, short-term payday loans that are widely viewed as predatory.
Its products are illegal in Connecticut and about a dozen other states, but permitted elsewhere.
CT Mirror examined DFC’s loan practices during Stefanowski’s tenure in a story published last week.
The payday loan angle was one of several in a Lamont commercial that quickly pivoted to the assertion that Stefanowski’s plan to phase out of the state income tax over eight years would necessitate disastrous cuts in state aid to municipalities.
Stefanowski’s new commercial has its own problems. It does not say how Lamont supposedly profited from payday loans, saying nothing of his wife, her company or its investments.
But the basis for the claim is investments in Wonga, a British payday lender startup, by Oak Investment Partners, a company that employed Annie Lamont as managing director until 2014, when she co-founded an affiliated firm that focuses on health care and financial technology, Oak HC/FT. Oak Partners doesn’t list the Wonga investment as part of the portfolio she managed.
“Bob Stefanowski launched a disgusting, patently false ad attacking Ned’s wife for something she had nothing to do with. Bob is trying to distract from the fact that he was actually the CEO of a payday lending company that ripped-off soldiers and veterans, but this ad and his business record show just how shameless and unprincipled he is,” said Marc Bradley, the manager of the Lamont campaign.
Kendall Marr, a spokesman for the Stefanowski campaign, said the ad raises a relevant point about Ned Lamont, even though it centers on the candidate’s wife, not the candidate.
“Lamont is OK with payday loans, as long as they lined his pocket,” Marr said.
Does the Stefanowksi campaign mean that? Does the candidate think Annie Lamont, a graduate of Stanford who has established a reputation as a savvy investor on behalf of Oak, checks with her husband before investing?
Annie Lamont, whose specialties include financial technology, could not be reached for comment Monday. Her company’s web site does not list Wonga as part of her current or past portfolio, and a Fortune story in 2015 identified another member of the firm as responsible for the investment.
Wonga attracted investors with an app that it says could quickly assess short-term loan applications. But an industry trade publication says a crackdown on payday lenders in the U.K. by Britain’s Financial Conduct Authority in 2014 caused problems for Wonga, as it did for DFC Global.
It seems unlikely that the investment in Wonga will line anyone’s pockets.
Wonga went bust a month ago.
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