Auto Title Loans: Am I Wrong in Noting a Flagging in Heartland Regional Boosterism?


Live from Elmwood Cafe: Annamarie Andriotis: The Pitfalls of Payday-Like ‘Title Loans’: “As a federal regulator is expected to release new rules for payday loans, a study suggests borrowers who take out ‘title loans’ against the value of their cars encounter many of the same issues…

…On average, title-loan borrowers pay $1,200 in fees per year on loans averaging $1,000, according to a report released Wednesday by the Pew Charitable Trusts, an independent nonprofit based in Philadelphia. The findings come as the Consumer Financial Protection Bureau plans a Thursday public hearing on payday loans…

As I have said, the extraordinary number of payday loan and title loan storefronts in Kansas City MO/KS relative to Portland OR takes me aback every time I go from one to the other. It makes me think that a huge portion of Kansas City, even people putting up a good front, are teetering on the edge of bankruptcy. It also makes me think that the people of Kansas City are making horrible financial decisions. And it reinforces my belief that too-large as share of the political-financial-business communities of Kansas City are composed not of boosters–not of people who believe that if their neighbors flourish they will flourish–but rather of various kinds of rent-seeking grifters.

For example, let me turn the mike over to Diane Stafford of the Kansas City Star:

Diane Stafford: Some KC law firms wonder if recruitment was economic development or raid on existing business: “Business and civic leaders usually are thrilled when new companies come to town.

But Russ Welsh, the head of Polsinelli, one of Kansas City’s largest law firms, is unhappy that the Kansas City Area Development Council has recruited two West Coast-based law firms to move their administrative operations–about 375 jobs–to Kansas City. In protest he said he’s withholding Polsinelli’s 2015 development council dues, at least for the time being. Welsh, a former chairman of the Greater Kansas City Chamber of Commerce–who otherwise might take an economic booster’s role–has also shared his concerns with the chairmen or managing partners of several other large Kansas City firms and asked for a group meeting Tuesday to talk about it. ‘We have all enjoyed a cost advantage over our competitors because of our location in Kansas City,’ Welsh wrote recently to the other law firms. ‘But I am concerned that this move will increase our employee costs and may drive some of us to move our core administrative functions to other cities.’…

The Kansas City Area Development Council, the agency charged with recruiting businesses to the metro area, led successful efforts to attract new administrative offices to Crown Center of the Littler Mendelson and Sedgwick law firms, two large national firms. Together, the two firms plan to employ about 375 back-office workers in Kansas City. Such offices generally handle information technology, finance, litigation support, human resources, marketing and research operations for the firms. Sedgwick’s recruitment was announced early last year. Littler’s move was announced earlier this month. Both Sedgwick and Littler said they chose Kansas City because it had a wealth of the workforce talent that they want….

Welsh, in a telephone interview Monday, said he was concerned that the Kansas City area lacked enough of that skilled workforce, particularly in information technology, to meet the needs of Sedgwick and Littler as well as those of the local law firms. He likened the situation to ‘raiding each other’ to induce companies to move across the state line between Kansas and Missouri, which fails to create net job gains for the area…. Welsh’s role as a past chamber chairman points out the economic development difference between the chamber and the development council….

And the Kansas City Star’s Editorial Board noted:

Editorial: Sorry, Russ Welsh: Wooing new businesses is good for the Kansas City region: “Getting people and businesses to move to the Kansas City area can be tough…

…No sandy beaches, no mountains, plenty of weather extremes…. Boosters properly point out the metro area’s better sides…. Attracting new companies and employers to Kansas City is almost always a positive thing…. But in recent days, a few lawyers in town have grown concerned that bringing in competitors could bleed them of employees and create higher payrolls. Russ Welsh, chairman and CEO of Polsinelli, recently expressed his ire with the Kansas City Area Development Council…. One good way to make this region a hub for key economic drivers, such as life sciences and information technology, is to invest in better-educated workforces. That includes ensuring nearby colleges and universities produce graduates who can fill the jobs of the future. Trying to shut the door on competitors coming to the Kansas City area is at odds with what needs to happen: Create a better image as a welcome home for new residents and businesses.

The depressing thing is that this needs saying–that it is not taken for granted that the political-financial-business elite of Kansas City MO/KS are composed of metro area boosters…

March 25, 2015

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