The reelection campaign for Maryland governor Larry Hogan (R.) is calling on his Democratic opponent Ben Jealous to return money he received from executives of LendUp, a payday loan company Jealous invests in that has been fined millions for predatory lending practices.
Jealous's investment in LendUp was revealed on Thursday morning by the Baltimore Sun, which reports that the company has been the recipient of fines totaling $3 million by the Consumer Financial Protection Bureau and California's Department of Business Oversight. Jealous, who was a critic of payday loan companies during his days as head of the NAACP, referred questions on the fines to the company.
The Hogan campaign responded to the report by pointing to contributions from LendUp executives—$2,500 from company founder and CEO Sasha Orloff and an additional $2,012 from vice president of policy Jotaka Eaddy—and demanding they be returned.
"We are calling on Jealous to return the thousands of dollars he's received from the executives of this seedy company," said Scott Sloofman, the campaign's communications director.
"LendUp is exactly the sort of exploitative corporation that Jealous would otherwise use his soapbox to skewer, but once he saw his own opportunity to make a buck from their anti-consumer practices, he gladly took it," said Sloofman. "Now, money made on the backs of the most vulnerable is bankrolling his campaign."
Jealous defended LendUp as an anti-payday lending firm that "is a leading voice for eradicating underhanded lending practices," but the company's fines were due to practices that have become common in the often under-fire payday lending industry. The company was caught charging illegal fees, calculating false interest rates, and failing to report required information to regulators, according to the Los Angeles Times, which reported that the company's loan rates regularly exceeded 600 percent.
The company was slammed by then-CFPB director Richard Cordray for presenting itself as a different type of lender. Like Jealous, Cordray is a Democrat who is now running for governor in Ohio.
"LendUp pitched itself as a consumer-friendly, tech-savvy alternative to traditional payday loans, but it did not pay enough attention to the consumer financial laws," Cordray said.
While $4,512 may not be a big ask for most campaigns, it may be for the Jealous campaign, which recently disclosed it has just $386,000 in cash on hand. Hogan, who enjoys a nearly 70 percent approval rating in a state where Democrats overwhelmingly outnumber Republicans, reported $9.4 million in his campaign account.
Polling data since Jealous came out of the primary earlier this month shows him trailing Hogan by double-digits.