Consumers Council of Missouri presented the 2015 Alberta Slavin Award to Senator Claire McCaskill for her efforts in the U.S. Senate to pass the Raechel and Jacqueline Houck Rental Car Safety Act in the omnibus transportation bill that passed Congress in December and that President Obama signed into law.  The law prohibits nearly all rental car companies, including many car dealers, from renting, loaning or selling recalled vehicles until the safety defects have been repaired.  Previously, federal law barred dealers from selling recalled new vehicles, but no similar law covered rentals.  The award is named for Alberta Slavin, who founded the Consumers Council and served as chair of the Missouri Public Service Commission.

KMOX Radio, July 1, 2015

While many businesses in Ferguson have still not re-opened, Pay Day Loans  was quick to open their doors. They have three locations along West Florissant.

Jacqueline Hutchinson is Board Chair for Missouri Consumers Council and says that this is typical from predators.

“We know that the rates for Pay Day Loans can be as much as 1,400 percent as compared to if you borrowed the money from a bank,” says Hutchinson.

She says that there needs to be legislation passed in Missouri to put a cap on interest rates  that a lender could charge. She adds that the military has capped at 36 percent the amount that a Pay Day lender can charge.

Hutchinson’s organization  works with banks and credit unions to help people in need of a loan with a reasonable interest rate that they can obtain.

If you are interested in more information on lending institutions, visit getbanknow.org.

St. Louis Post-Dispatch, September 29, 2015

WASHINGTON • The U.S. Department of Justice announced Tuesday it has reached a settlement with Eagle Bank & Trust Company of Missouri resolving allegations of lending discrimination in St. Louis.

Mike Walsh, the bank’s president and CEO, said Eagle disagreed with the government’s allegations but agreed to the settlement to “put the best interests of the people we serve above any desire to continue discussions in the hopes of reaching a different outcome.”

The “consent decree,” which requires the approval of the U.S. District Court for the Eastern District of Missouri, requires the bank, which has 12 locations in the St. Louis region, to open two new locations to serve predominantly African American neighborhoods in “northern St. Louis,” the Justice Department announcement said.

The bank also will set aside at least $975,000 for “banking and borrowing activities” to residents and businesses in those neighborhoods.

The agreement came after allegations that the bank had engaged in “redlining,” the practice of denying or avoiding providing credit services to consumers in neighborhoods based on those neighborhoods’ demographic makeup, according to the Justice Department statement.

The Justice Department complaint alleged violations in the Fair Housing Act and the Equal Credit Opportunity Act, laws that prohibit banks from discriminating in mortgage practices based on race.

“The Department of Justice is committed to holding banks accountable for their role in continuing historic trends of residential segregation,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, in a statement explaining the action.

“The practice of redlining violates our laws and harms our communities. We commend Eagle Bank for becoming part of the positive change that must come to the African American neighborhoods in St. Louis. The community partnerships and lending programs that are part of our settlement will bring much-needed investment to communities in northern St. Louis.”

The suit emanated from information passed on by the Metropolitan St. Louis Equal Housing Opportunities Council, a fair-lending advocacy group, and provided to the Federal Deposit Insurance Corporation. The FDIC investigated and referred the information to the Justice Department’s Civil Rights Division.

In 2013, the bank received a “needs to improve” rating from the FDIC on its Community Reinvestment Act evaluation. That act was passed in 1977 to combat redlining.

In a statement, Walsh said that the bank and Justice Department had been in discussions for two years.

“Eagle Bank firmly believes in fair lending practices, as they make us stronger as a bank and help create even stronger communities,” Walsh said. “Throughout the past 100 years, Eagle Bank has been a community partner and engaged corporate citizen in St. Louis. For the past 30 years, we have been repeatedly recognized for our commitment to community engagement and improvement.”

KWMU, July 31, 2015

Large rate increases for health insurance may be in the works for some Missourians this year, but we won’t know the final prices for a few months.

Last month, insurance companies nationwide submitted their bids for rate increases. The Missouri proposals from Coventry Health Care were among the steepest, including a 29 percent hike for individual plans sold on Healthcare.gov. According to rate filings, Coventry’s rate increases could affect 70,000 people.

Because the state of Missouri does not review its own health insurance rates, federal regulators will decide whether the price hike is warranted. In the meantime, members of the Consumers Council of Missouri are sending letters to the U.S. Department of Health and Human Services objecting to the increases, and asking federal officials to hold a hearing.

The Consumer Council’s executive director, Joan Bray, has long advocated for Missouri to implement its own rate review process.

“There’s only five states in the country that don’t have an adequate rate review process. But Missouri’s the only one that has nothing,” Bray said.

After a lawsuit brought by the Consumers Council, HHS began publishing the proposals for rate increases on its website. Only companies proposing an increase of 10 percent or higher are required to file the paperwork.

“I wouldn’t be surprised if the rate increase is higher this year. And that’s because in general health spending is starting to increase again,” said Tim McBride, a Washington University health economist.

Regulators often negotiate the rate proposals down to more reasonable increases, so speculating on the rate bids is likely premature, McBride said. (He discussed it more broadly on his blog). But he added that the market is still seeing inflation of 4 to 6 percent compared to last year.

“Coming out of the recession, the first couple years of the Affordable Care Act, healthcare inflation was about the lowest it’s been. But it’s starting to return a little more to its more traditional increases,” McBride said. “I don’t think it’s out of control yet, but we’re certainly watching it.”

Aetna spokesperson Rohan Hutchings wrote in a statement that Coventry’s proposed double-digit hikes “simply reflect the costs” of doing business:

“For 2016, we expect that medical costs will grow by 8-10% in the individual market. Other factors driving rates include changes in the reinsurance program (approximately 5-6% increase across all markets), risk pool experience, and taxes and fees,” it read.

Meanwhile, health insurers have enjoyed significant boosts in their market share. Since the implementation of the Affordable Care Act,  16.4 million previously uninsured people have enrolled in health insurance, according to the federal government.

Final rate increases will be published in the fall.

Consumers for Auto Reliability and Safety, July 30, 2015

Today the U.S. Senate voted to enact the Raechel and Jacqueline Houck Safe Rental Car Act, as part of the DRIVE Act, which will provide long-term funding for transportation projects across the nation.

The rental car provision was the only part of the bill relating to safety that both sides of the aisle agreed on.  The Safe Rental Car Act (S 1173) was included in the bill that Senator John Thune (R-SD) proposed and was adopted unanimously in the Commerce Committee.  Senators Charles Schumer (D-NY), Barbara Boxer (D-CA), and Claire McCaskill (D-MO) played leading roles in championing the measure.

The Senate passed the larger bill on a vote of 65-34.  While the House still has to act, the strong bipartisan support bodes well for final passage.  The Obama Administration’s Department of Transportation and National Highway Traffic Safety Administration (NHTSA) have requested that Congress give the agency the authority to police recalled rental cars and used cars.

The rental car safety portion of the bill was introduced as separate legisltaion, S 1173, named after Raechel and Jacqueline Houck, two sisters, aged 24 and 20, who were killed in 2004 in a recalled Chrysler PT Cruiser that caught fire and lost steering.  Since 2010, their mother, Cally Houck, has been working closely with Consumers for Auto Reliability and Safety (CARS) for passage of legislation to protect the public from unsafe recalled rental cars.  The rental car industry itself, including Enterprise, Hertz, Avis, and other major rental car companies, plus many smaller rental car companies (except Rent-a-Wreck) and the American Car Rental Association, have been actively supporting the bill, working with Cally and CARS for passage. However, the bill was stalled until now due to opposition from auto manufacturers and car dealers.

After Senate passage, Houck said, “”It’s heartening to see the act named for my beautiful, talented daughters pass with resounding bipartisan support in the U.S. Senate. I’m optimistic that we will finally succeed in making it a violation of federal law for a rental car company to rent or sell a recalled car before it’s repaired and safe to drive.”

The legislation would make it a violation of federal law, enforceable by NHTSA, for rental car companies to rent or sell unrepaired recalled cars.  Once the companies receive the safety recall notice, they would have to ground them pending repairs.  The Senate bill would give NHTSA the authority to fine the rental car companies or invoke other sanctions if they violate the law — even if no one is injured or killed.  This new protection would be in addition to existing protections under other provisions of the law, including state laws that Cally and Raechel and Jackie’s father and their attorneys used to sue Chrysler and Enterprise.

“When consumers and families drive a rental car off the lot, they should be able to do so with the confidence that car is safe to drive. We’re one step closer to that peace of mind today,” McCaskill said in a story published by Bloomberg News on July 15 after the bill passed in the Commerce Committee.

On Tuesday, U.S. Rep. Capps (D-CA), speaking on the House floor, called on Chrysler to stop opposing the rental car safety bill and join GM and Honda in supporting it.  Chrysler manufactured the defective PT Cruiser that killed the Houck sisters.  It has persistently opposed the legislation.

Capps is championing enactment of the House bill, HR 2198, that is identical to the Senate bill that was included in the larger transportation bill.  The bill is co-sponsored by Reps. G.K. Butterfield (D-NC), Walter Jones (R-NC) Jan and Schakowsky (D-IL).

The Senate rejected an attempt by the opponents of the rental car safety bill — many auto manufacturers and car dealers — to legalize rentals of recalled cars with “disclosure” — which would have undermined existing protections and shifted liability onto victims of unsafe recalled rental cars.

If passage of the legislation had not been delayed for years, due to opposition from the auto manufacturers and car dealers, it might have saved the life of Jewel Brangman,  26, who was killed in a fender bender on Sept. 7, 2014.  She was driving a recalled 2001 Honda Civic with a Takata air bag that exploded with excessive force and severed blood vessels in her neck.

The Detroit News, July 23, 2015

General Motors Co. now faces an investigation by the Federal Trade Commission, adding to a list of several authorities and agencies looking into the automaker’s conduct after its delayed ignition switch recall last year.

The automaker disclosed the investigation in a regulatory filing Thursday. It was unclear if GM or its dealers are the target, however.

GM said it was notified June 3 of the investigation by the FTC that concerned “certified pre-owned vehicle advertising where dealers had certified vehicles allegedly needing recall repairs.”

A GM spokesman declined to comment on the investigation beyond what was said in the regulatory filing. An FTC spokesman on Thursday confirmed the investigation, but declined further comment.

Last year, GM recalled 2.59 million older Chevrolet Cobalts, Saturn Ions and other small cars for faulty ignition switches that can turn off while driving, disabling air bags. The company initially tied the defect to 13 deaths, but an independent ignition switch compensation fund administrator has approved 124 death claims tied to the defect.

The automaker faces investigations by the Department of Justice, 50 state attorneys general, Transport Canada and the U.S. Securities and Exchange Commission.

GM could face criminal penalities tied to the Justice Department investigation. The automaker also could face a sizable fine.

GM also has been sued in 100 U.S. class action lawsuits and 21 in Canada for economic harm allegedly caused by recalls of vehicles, plus 172 federal/state lawsuits in the U.S. and nine in Canada alleging injury or deaths related to recalls, according to the filing.

“Such lawsuits and investigations could in the future result in the imposition of damages, substantial fines, civil lawsuits and criminal penalties, interruptions of business, modification of business practices, equitable remedies and other sanctions against us or our personnel as well as significant legal and other costs,” GM said in its quarterly earnings filing with the SEC.

The automaker says it does not have an estimate for the potential impact of the lawsuits or investigations it faces.

Bloomberg Business, July 16, 2015

A Senate panel killed a proposal to permit companies to continue renting vehicles that have been recalled, a measure criticized by consumer groups, automakers and even some rental-car companies.

The Commerce, Science and Transportation Committee instead voted Wednesday to require cars be repaired before they’re rented.

The change resulted from an amendment by Senator Claire McCaskill, a Missouri Democrat. It modified a bill, introduced last week by Senator John Thune, a South Dakota Republican, that would have allowed rentals with known safety defects as long as companies disclosed the open recalls to customers.

“When consumers and families drive a rental car off the lot, they should be able to do so with the confidence that car is safe to drive, and we’re one step closer to that peace of mind today,” McCaskill said.

The panel approved the overall bill, which sets policy for automotive, trucking and rail regulators, on a party-line 13-11 vote. Democrats objected to the measure, saying it failed to include needed auto-safety provisions.

In the past week, Honda Motor Co. joined General Motors Co. as the second automaker to back the Democrats’ push for a ban on rentals with safety defects.

Consumer Protection

The American Car Rental Association, a trade group that includes Hertz Global Holdings Inc., Avis Budget Group Inc. and Enterprise Holdings, described the original Republican bill as a “significant step back in consumer protection” compared with current industry practices in a July 13 letter to committee leaders.

The National Automobile Dealers Association and the Alliance of Automobile Manufacturers aired objections about the Democrats’ proposal, saying it would have the unintended effect of harming consumers because dealerships would be forced to repair rental cars before their customers’ vehicles.

Thune said the overall bill would increase funding for National Highway Traffic Safety Administration investigations and double civil penalties for automakers to $70 million. Those changes would be directly tied to the agency adopting changes recommended by Transportation Department inspector general, he said.

“The bill before us today makes a host of important improvements when it comes to motor vehicle safety,” Thune said.

Jail Time

Democrats introduced an amendment that failed on a party-line vote to give NHTSA more funding and allow jail time for executives who hide auto-safety defects.

Some critics said the legislation failed to reflect safety lessons learned from faulty ignition switches in General Motors Co. vehicles and Takata Corp. air bags that exploded and killed motorists.

“This is a tragic and neglectful assault on consumer rights in favor of the auto and trucking industries,” said Senator Richard Blumenthal, a Connecticut Democrat. “Sadly, the majority failed to learn the lessons of the GM ignition-switch cover up and Takata’s exploding air bags.”

The legislation approved by the panel would force the Federal Motor Carrier Safety Administration to overhaul one of its primary enforcement tools, a publicly available listing of safety violations of trucking and bus companies, which compares individual firms with industry averages.

The agency would have to remove scores from public view while it responds to critiques from the Government Accountability Office and the Transportation Department’s inspector general. That change has been backed by the trucking industry.

For railroads, the measure would allow the Transportation Department to adjust deadlines for implementing crash-avoiding train technology on a case-by-case basis. Thune said the action was needed because few railroads were going to make the existing 2015 deadline. Installations would be delayed to no later than 2018.

Consumers Council of Missouri, July 2015

Missouri is the only state in the country in which the Department of Insurance has no authority over health insurance rates.  As a result, under the requirements of the Affordable Care Act the federal Department of Health and Human Services reviews the rates for Missouri.

Because the state doesn’t review rates on behalf of consumers, Consumers Council of Missouri teamed up with Missouri Foundation for Health to analyze the rates for 2016 and let HHS know which rates we believe are unreasonable and excessive.  This is the first time health insurance rates will be reviewed in Missouri before they go into effect.

Unlike some state insurance departments, HHS doesn’t have the authority to disapprove rate increases in the states, but it does have the authority to deem them unreasonable.  And if HHS finds an insurer’s rate increase to be unreasonable, both it and the insurance company must post that finding on their websites.

That’s not a lot of help for consumers.  But it’s something.  And in the past, in other states, some insurance companies have reduced their rates after HHS found them to be unreasonable.

Within the next few weeks CCM will be posting on its website its analysis of the rates for the next enrollment period and the comments we send to HHS about unreasonable, excessive rates.  We will encourage consumers and advocates to file their own comments based on our analysis and will give step-by-step instructions on how to construct and file comments.  Comments may be either emailed to ratereview@cms.hhs.gov or submitted at https://ratereview.healthcare.gov/ .

How the Rate Review Process Works

When insurance companies increase their rates they include a Rate Filing Justification, or RFJ, which contains the documentation supporting the increase.  The RFJ consists of three parts.

Part I is a compilation of the data used to determine the increase.  Part II is a summary explanation of the assumptions used to develop the increase and the most significant factors responsible for the increase.  Part III is the actuarial memorandum and exhibits, which contain the assumptions and reasoning supporting the increase and the data contained in Part I.

Under its Rate Review Rule, HHS must make the filings public in time for consumers to comment on proposed increases and for HHS to consider those comments in determining whether the rate is unreasonable.

Anyone wishing to file comments with HHS on rate increases in Missouri can do so atratereview@cms.hhs.gov.  As noted above, more detailed instructions will come after CCM makes its analysis of the rates and comments public.

CCM has produced a guide to rate filing and rate review, Health Insurance Rate Review for Missouri Consumers, which anyone wishing to comment should find helpful.  Click here to see the guide.

Unfortunately, HHS declined to make the data for either 2014 or 2015 public in time for consumers to comment on proposed rate increases.  However, after CCM filed a Freedom of Information Act complaint in federal district court in St. Louis seeking the timely release of the data, HHS agreed to make public the proposed increases for 2016.  It will also make them available in future years by June 1 of the year before the rate hikes take effect.

HHS has therefore now posted data for 2016 rates at a new website,www.ratereview.healthcare.gov.  Some information in the Part III’s has been redacted – blackened out — because insurers claim that information is trade secret.

HHS has also released to CCM, in connection with CCM’s FOIA complaint, the Part III’s supporting 2015 (this year’s) rates.  Because many of those Part III’s are unredacted, they include data that the 2016 Part III’s do not include. That may make them particularly useful to consumers wishing to comment on proposed 2016 rates.  Click on each rate filing to view it.

2015 Aetna Small Group HMO

2015 Aetna Small Group PPO

2015 Anthem Individual

2015 Anthem Small Group 1-1-2015

2015 Anthem Small Group 4-1-2015

2015 Blue Cross and Blue Shield of Kansas City Individual-1

2015 Blue Cross and Blue Shield of Kansas City Individual-2

2015 Celtic Exhibits A&B

2015 Celtic Individual Major Medical

2015 Cigna Individual

2015 Coventry Individual HMO

2015 Coventry Individual PPO

2015 Coventry Individual

2015 Coventry Small Group HMO

2015 Coventry Small Group PPO-1

2015 Coventry Small Group PPO-2

2015 Cox Individual

2015 Cox Small Group

2015 Federated Small Group

2015 Freedom Individual Major Medical

2015 Humana Individual

2015 Humana Small Group

2015 John Alden Small Group Major Medical

2015 Time Individual Major Medical

2015 Time Small Group Major Medical

2015 United Health Care Individual-1

2015 United Health Care Individual-2

2015 United Health Care Small Business-1

2015 United Health Care Small Business-2

To search the Part I’s, Part II’s and redacted Part III’s requested in 2015 for 2016 and in 2014 for 2015, go to https://ratereview.healthcare.gov > Search ACA-Compliant Products > Choose a State > Missouri > Submit Search

Joplin Independent, July 13, 2015

ST. LOUIS, Mo – The Consumers Council of Missouri announced yesterday that it is calling upon Sen. Roy Blunt, R-MO, to co-sponsor legislation to bar rental car companies from renting or selling unsafe, recalled vehicles to the public until the safety defects have been repaired. A key vote over rental car safety is expected July 15, 2015, in the U.S. Senate Commerce Committee.

Under pressure from auto manufacturers and car dealers, Congress has delayed acting to protect the public. Recently, Honda admitted that a faulty Takata air bag in a recalled Honda Civic rental car claimed the life of a 26-year-old woman when the air bag exploded with excessive force, sending shrapnel into her neck.

The bill, S. 1173, the Raechel and Jacqueline Houck Safe Rental Car Act of 2015, has been re-introduced for several years. It is named in memory of two sisters, ages 24 and 20, who were killed by an unrepaired, recalled rental car in 2004, near Santa Cruz, California. The Houck sisters were killed by a 2004 Chrysler PT Cruiser rented from Enterprise, based in St. Louis.

Subsequent to the settlement of a lawsuit by the Houck sisters’ parents, Enterprise responded to the outreach from consumer groups, including Consumers Council and Consumers for Auto Reliability and Safety (CARS), and became an ally in actively advocating for passage of the Safe Rental Car Act.

As a majority member of the Senate Committee on Commerce, Science and Transportation, Senator Blunt is in a position to play a key role in passage of the bill.

“How many more people have to die before Senator Blunt joins Enterprise, one of our state’s largest businesses, and consumer groups in protecting the public?” asked state Rep. Tracy McCreery, secretary-treasurer of Consumers Council’s Board of Directors. “He should be leading the way on common sense protection for consumers who rent cars.”

Enterprise, Hertz, Avis, many smaller rental companies and the American Car Rental Association have been working in concert to support the bill, asking to be regulated by the National Highway Traffic Safety Administration. In addition, last year General Motors changed its position and switched from opposing the bill to supporting it, after it was amended to clarify that it would not change existing law regarding manufacturer’s obligations to compensate rental car companies for lost revenue.

Meanwhile, all of the major rental car companies and their trade association have pledged to stop renting or selling recalled cars until they have been repaired. However, as the recent tragedy showed, federal legislation, enforceable by NHTSA, is needed to ensure that all rental cars are free from lethal safety defects that have led to a manufacturer’s safety recall. Last August, Jewel Brangman, age 26, rented a 2001 Honda Civic from a small rental car company in San Diego. On September 7, she was involved in a low-speed chain-reaction crash in Los Angeles. She should have been able to walk away from the crash, but the defective air bag exploded into her neck.

St. Louis Post-Dispatch, July 13, 2015

Erica Hollins borrowed $100 in 2006 at the Loan Express store on Olive Street downtown. By 2011, she had paid back $3,592, garnished from her wages at a nursing and retirement home.

She might still be paying today had she not found a lawyer to try to stop it.

She wasn’t — and isn’t — the only one in that fix. Other people who borrow small amounts in St. Louis end up paying 50 and 60 times the original amount borrowed through wage garnishments.

One poor fellow borrowed $80 and ended up owing about $25,000, according to court filings.

Holding their noses, judges of the Missouri Court of Appeals last month ruled that the big garnishment against Hollins was legal under state law.

The result “seems egregious and would likely shock the conscience of the average person,” wrote Presiding Judge Kurt Odenwald, who said the judges were “very sympathetic” to Hollins.

The case shows the “inherent injustice in these lending arrangements,” wrote Judge Robert Dowd Jr. He called it a “clear example of predatory lending.”

In other words, shockingly egregious predatory injustice is allowed under Missouri law, and judges must uphold it.

Here’s how these things happen. Hollins borrowed $100, agreeing to pay it back in five monthly payments of $31, totaling $155. As it says on the loan contract, that’s an annual interest rate of 199.7 percent.

She made the first payment, knocking the principal down a bit, but never made the other four. So some of this mess is Hollins’ fault, as the judges noted.

“She had every opportunity to pay it off,” noted Michelle Drake, the lawyer representing Loan Express. In court documents, Loan Express said it made 50 attempts to contact Hollins by phone and mail over 15 months in 2006 and 2007.

It’s not worth suing over a small debt. But the clock kept running on the interest. At 199 percent, that adds up fast. By June 2009, the debt was at $729. Loan Express tacked on a late fee and other charges and sued Hollins for $924.

Hollins didn’t show up in court. In depositions, she said she never learned of the suit. A St. Louis County judge entered a judgment, and a garnishment against her wages.

An odd thing happens in such cases. A garnishment can only take so much from a person’s pay. With interest running at 199 percent, the garnishment sometimes isn’t enough to cover the rapidly compounding interest. So the debt gets bigger even as the debtor pays and pays.

In effect, the debtor becomes a bound servant of the lender, paying in perpetuity, with courts cracking the whip. “You’ll never pay it off. They’ll garnish you for the rest of your life,” said Rob Swearingen, an attorney with Legal Services of Eastern Missouri, a nonprofit group that represents poor people.

Garnishments in Missouri can take 25 percent of a single person’s wages, and 10 percent from someone with dependents.

In court filings, Hollins lawyer lists other such cases involving Loan Express and its owner, Capital Solutions Investments.

A sampling:

• S.S. borrowed $80. Capital Solutions got a judgment for $2,137. By the time the case was filed, $5,346 had been collected, and a balance of $19,643 remained.

• D.W. took out a $100 loan. A judgment was entered for $705.18. The garnishment yielded $3,174, and a balance of $4,105 remained.

• C.R. borrowed $155. Capital Solutions sued for $1,686.93. They had collected $9,566 and C.R. still owed $2,162.07.

For such borrowers, the only way out may be bankruptcy. But filing bankruptcy costs money.

Can such big collections on small debts be justified? Drake noted that such loans go to high-risk borrowers and high interest rates reflect the risk that the borrowers won’t pay. The Legislature allows interest rates that reflect that risk, she said.

I couldn’t reach Todd Stimson, president of Capital Solutions and Loan Express, who describes himself on his website as a “self-made millionaire.” In a 2013 interview with ProPublica, the investigative journalism group, Stimson said he has to file such suits or “word gets out in the neighborhood, ‘Oh, you won’t get sued anyway, just don’t pay them.’”

Consumer groups attack payday loan shops as high-interest ripoffs. But there are actually more protections for payday loan borrowers than for the type of loan that Hollins received.

Payday loans are limited to 30 days, although most are for two weeks. They can be renewed, but interest and fees on a single loan can never exceed 75 percent. (Consumerists say there are ways to get around that limit.)

Hollins borrowed under the state’s consumer installment loan statute. That governs loans of 120 days or more, and there are no interest limits.

That troubles Judge Dowd. “The debtor in these types of situations has absolutely zero power to negotiate a reasonable interest rate; instead, such debtors will pay whatever amount the lender decides to charge,” he wrote.

The number of payday loan shops has been dropping in Missouri, while the number of installment loan operations has been growing. Among Swearingen’s poor clients in debt trouble, he finds a clear trend away from payday loans and toward installment loans.

Loan Express waited two years to sue Hollins, and Swearingen says that’s typical in small-dollar installment loan cases. “They want the principal and interest to accumulate to the point where it will be profitable over the long run,” he said.

Hollins’ problems can be traced back to an expose published in 1989 in the Post-Dispatch. The story showed how loan shops in St. Louis were charging 200 percent interest and more on small loans, and told of consumers being driven into bankruptcy. At the time, state law limited small-loan interest to 26 percent.

The Legislature jumped into action — and abolished the 26 percent limit.

For a while, the state banking commissioner was allowed to set a higher limit. But in 2001 even that limit was lifted. Small-dollar installment lenders were let loose.

Hollins found a lawyer in 2011. The lawyer, Alicia Campbell, filed a class-action suit against Capital Solutions, owner of Loan Express, demanding relief for everybody in Campbell’s situation. A deposition in the court case indicated that Capital Solutions was suing people at a rate of 75 per year and had 350 suits on record.

With the law against her, Campbell threw up various technical objections to the judgment. The court generally struck them down. Hollins’ case was hobbled because no one raised such objections at the original trial, and by the fact that she waited two years to appeal, missing a crucial deadline.

Of course, the typical loan shop customer doesn’t know how to defend a lawsuit and can’t afford a lawyer.

Dowd would have agreed with one contention — that the clock on interest stops after the initial default, and interest doesn’t start accumulating again until the lender gets a court judgment. Drake disagrees, and says courts have never really settled that issue.

However, even Dowd ruled against Hollins because of the delay in raising such issues.

One good came out of the lawsuit. Capital Solutions dropped its garnishment against Hollins after the suit was filed in 2011, Drake said.