Hours of impassioned testimony dominated discussion during a hearing on a bill that would create a statewide database for tracking payday loans, a seemingly innocuous concept met with fierce resistance and dire rhetoric from the industry and its supporters.
Lobbyists, pastors, a little league coach and dozens of employees of payday lending companies packed hearing rooms Wednesday for a hearing on SB201, which would create a database to track information on high-interest (more than 40 percent) short-term loans that includes amounts, fees assessed on borrowers, default rates and all interest charged on loans.
The bill also codifies portions of the federal Military Lending Act — which prohibits lenders from charging active-duty military members more than 36 percent interest — and authorizes lenders to provide information on food stamps and other safety net programs offered by the state.
But the bulk of testimony, questions and opposition throughout the nearly three-hour hearing dealt with the payday loan database concept; something supporters said would ensure all lenders are following state laws and curb abusive loans but which opponents (who include top legislative donors and lobbyists) said would unnecessarily burden and possibly damage the industry.
The concept of a payday loan database isn’t new; at least 14 other states have passed laws to operate with a similar database with charges between $0.43 to $1.24 per loan to operate the system. Databases in other states are run by a private contractor, Veritec Solutions.
Nevada has approximately 95 businesses licensed as high-interest lenders, with about 300 branches statewide. In 2016, those businesses made approximately 836,000 deferred deposit loans, nearly 516,000 title loans and up to 439,000 high-interest loans.
The bill’s sponsor, Democratic Sen. Yvanna Cancela, said the bill arose out of a 2018 audit of the state’s Division of Financial Institutions — the agency that oversees and regulates payday lenders — that found nearly a third of lenders had a less-than-satisfactory rating over the last five years. The audit suggested that a loan tracking database would have “significant value to the Division, its licensees, and Legislators.”
Cancela called the audit “striking” and said the bill was an attempt to improve regulation of the industry by giving regulators a real-time ability to check loans, as opposed to their current model of yearly audits or responding to complaints from the public.
“This is going to be a tool for the state to more efficiently enforce our existing consumer protections, and won’t be accessible to anyone but state regulators who currently have a right to this information,” she said.
The bill requires the Division of Financial Institutions to contract with a vendor to create the database, which includes:
Information from individuals with loans outstanding from more than one lender
Any outstanding loan taken in the 30 days preceding another loan
Any case where a borrower has taken three or more loans from a single lender within a six month period
George Burns, who heads the division, told lawmakers that a database would be a useful regulatory tool.
“The ability to enforce (these laws) of course, is a question of what is the adequacy of the resources and the tools that FID has to enforce all of this,” he said. “What we’re looking at here on this particular bill is improving those tools and augmenting the resources in order to do so.”
Although states charge a variety of fees to implement their databases, Burns said the division expected the fee to be less than a dollar and that the actual amount would need to be approved through the regulatory process.
Tennille Pereira, an attorney with the Legal Aid Center of Southern Nevada, told lawmakers that creation of a database would solve two problems: borrowers who take out loans from multiple lenders to get around the state’s limit on extending loans beyond 25 percent of a person’s income, and lenders who allow borrowers to pay off an existing loan by taking out another high-interest loan, which is not allowed under state law.
Supporters included a variety of progressive and social service groups, as well as state Treasurer Zach Conine. Pastor Sandy Johnson with United Methodist Church in Boulder City, representing the interfaith group Nevadans for the Common Good, said she had a personal friend who experienced great financial difficulties brought on by payday loans
“If existing state laws were enforced, consumers like her would be protected from being trapped in a debt cycle for more than two decades,” she said. “The long term economic stability of families should not be undermined if they take out a short-term loan.”
But lobbyists for the lending industry staunchly opposed the proposed law, saying that even a small fee tacked onto the loans to create a database could have a significant effect on interest rates. In a memorandum submitted by payday lending companies Moneytree, Check City, USA Cash and others, the industry claimed that adding even a minimum $1 fee to loans would increase interest rates by as much as 52 percent on certain loans.
Alisa Nave-Worth, a lobbyist for that group of lenders, said the industry strongly disputed the methodology of the audit but that the database would have only prevented about 5 percent of the complaints or issues raised in the audit. She brushed away suggestions that the industry was not looking out for the best interest of consumers, saying that saddling borrowers with debt wasn’t good business.
“It does not make sense to give a loan to someone who can’t pay back,” she said. “It’s not good business.”
Also testifying in opposition was former Clark County Commissioner Susan Brager, who said she initially opposed Dollar Loan Center and other high-interest lenders, but came around to them after touring their facilities and seeing the service they provided to consumers in need of short-term credit, and that passing the bill would drive the industry model away.
“It will be underground, and it will be detrimental to those who need a stopgap solution,” she said.
But the largest presence by far was by Dollar Loan Center, the short-term lender with 42 Nevada branches. Around 50 to 60 employees attended the hearing in Las Vegas, as well as a radio station manager and Little League organizer who both testified to the company’s business ethics.
Sean Higgins, a lobbyist for the company, said it did its own analysis of loans given to borrowers in 2018 and found its average actual interest rate was below 30 percent. He said that the company also uses its own database with other lenders to ensure that borrowers weren’t taking out more loans than they should.
“There is no quote unquote debt treadmill that these people get stuck in,” he said.
But Cancela told members of the committee that much opposition testimony made overreaching conclusions about the bill, and that creation of the database would not affect lenders who followed the law and didn’t extend loans in violation of the law.
“What I think is most important in considering your support or opposition to this bill, is how better enforcing current laws would in any way change the industry's ability to operate,” she said.
The industry has an established position in Carson City, contributing more than $172,000 to state lawmakers over the last two years, with top recipients including Assembly Speaker Jason Frierson ($23,500) and Senate Majority Leader Nicole Cannizzaro ($11,000). At least eight high-interest lenders are represented by 22 different lobbyists in Carson City, including former Democratic legislators John Oceguera, Marcus Conklin and William Horne.
Similar concepts were proposed by the 2017 Legislature but fell short. A measure proposed by Democratic Assemblywoman Heidi Swank creating a database failed to make it out of committee, and an emergency measure introduced by Assembly Speaker Jason Frierson in the waning days of the legislative session passed the Assembly on a 30-11 vote but flamed out in a Senate committee.
It’s unclear what will happen to other measures affecting high-interest, short-term loans. Democratic Assemblywoman Heidi Swank said Tuesday that her bill AB118 setting a 36 percent rate cap on high-interest, short-term loans has not yet been scheduled for a hearing.
On the morning of the first day of his first legislative session as governor, Steve Sisolak was squatting on the floor of the legislative building in a suit and leather-topped sneakers high-fiving children.
Unlike Secretary of State Barbara Cegavske or Lt. Gov. Kate Marshall, Sisolak was incidental to the day’s proceedings, which largely consisted of lawmaker swearing-ins and mundane legislative business. But instead of holing up in the Capitol as snow swirled outside, the newly inaugurated governor had decided to hobnob in the halls of the legislative building.
His presence marked a departure from the distance that his predecessor, Republican Gov. Brian Sandoval, put between himself and the legislative process.
Although Sandoval also set a goal after he was elected to meet with every lawmaker, he was more likely to summon lawmakers to the Capitol for formal meetings in his office. Sisolak made the short walk across the snowy courtyard to meet with lawmakers on their own turf.
“He hasn’t served in the Legislature before and so he wanted to go over there and get to know folks,” said Michelle White, his chief of staff, “and let them know he meant what he said about being accessible and wanting to sit down with them and go to where they are.”
The gesture didn’t go unnoticed by lawmakers on either side of the aisle, several of whom tweeted out pictures of their meetings with the governor.
“It was much more casual than last time,” second-term Assemblywoman Shannon Bilbray-Axelrod, a Democrat, said of her meeting with Sisolak. “Going over to his office was very formal, I would say, with Sandoval.”
But the man-of-the-people persona he’s exuded in his first several weeks in office as he and his wife have embarked on an eating tour of Carson City and toured the rural portions of the state belies the reputation Sisolak earned as a headstrong negotiator in a decade serving on the County Commission.
Those who have worked closely with him describe him as someone who not only won’t back down from a fight, but will sink his teeth in further when challenged — qualities on display in a battle with firefighters over their sick leave system and a clash with ride-sharing companies Uber and Lyft.
Although former commission colleague Tom Collins characterizes his style as bullying, primary opponent Chris Giunchigliani said he can be “controlling” and critics see his frequent public and media appearances as evidence of egotism, his supporters view him as accessible, a tough fighter with the wherewithal to lead the state.
“What I saw from him is, when he does believe in something, he is a pitbull. But I don’t see him as a bully,” said Susan Brager, who spent 10 of her dozen years on the County Commission serving with Sisolak and sided with him against a fellow commissioner in a fierce Democratic primary. “I think when you stand strong, it can appear that you’re doing that, but that’s his character, nature, compassion and passion.”
For his part, Sisolak describes himself as a “solutions-oriented consensus-builder.”
“Throughout my service on the Board of Regents and Clark County Commission, I worked hard to forge consensus among diverse groups of people to achieve results for Nevada families,” he said in a statement. “I am willing to sit down with anyone to discuss common-sense solutions that are in the best interests of working families in our state.”
What remains to be seen is how Sisolak’s style translates to his new role as the state’s top executive, where he’ll have the final say in heated debates on gun control and collective bargaining for state workers and power to shed more light on the mostly opaque cannabis and pharmaceutical industries.
In his first days in office, he flexed his political muscle with a sharply worded statement, a self-assured press conference appearance and a series of legal maneuvers when the federal government shipped plutonium to Nevada without consent.
“We all got fired up, too, and I think a lot of Nevadans across the state would agree — they want a governor who is going to be aggressive in their approach and go get something done and take bold steps and get angry because that wasn’t the right thing to do,” White said. “He gets fired up when he thinks regular Nevadans are going to be harmed by something.”
Ron Knecht, a Republican former state controller who served on the Board of Regents with Sisolak, said he’s seen both the friendly and forceful sides of the governor.
“He’s personable, he’s got a likeable personality, the kind of guy … you’d either drink beer or scotch with him,” Knecht said. “He’s a strong leader. And sometimes just on the edge of being too strong.”
A budget hawk
Sisolak has touted his fiscal conservatism in the past. He put that aside during the gubernatorial primary when he sought to win over the hearts and minds of progressives, but people who have known him for years say budget hawkishness is his default.
“I consider him to be a hard-nosed negotiator, particularly on issues related to money,” said Don Burnette, who was the county manager for Clark County from 2011 to 2016. “He treated taxpayer money … as if it were his own … He’s definitely the guy you want on your side if you’re going into a fight and it involves money.”
As a member of the Board of Regents, Sisolak earned a reputation for “crunching budget numbers,” a skill he told the Las Vegas Sun he was looking forward to applying to the County Commission. Commission Chair Marilyn Kirkpatrick says it will serve him well in his current role.
“My hope is and my expectation — because I think he’ll do it — is to take things into consideration on the budget that he balanced for many years,” Kirkpatrick said. “The county budget is similar to the state budget.”
When Sisolak took office as a county commissioner in 2009, he became part of the first all-Democrat commission the county had seen in 40 years. It was also a time of great scrutiny on spending as the extent of the recession became more clear.
“The cutbacks were fairly painless to begin with — things like trying to reduce travel and training and discretionary spending, and that got progressively worse,” Burnette said. “About the time I became county manager, the only way left to deal with revenues that were still on the decline was to go through widespread layoffs.”
Sisolak was supportive of the county’s efforts to whittle down its budget during the recession, saying that the county should be a good steward of taxpayer dollars in good economic times as well as bad ones. After all, local government employees who have the right to collectively bargain generally make significantly more than state employees who don’t, according to state-sanctioned salary studies.
He questioned the many opportunities county workers had to boost their pay.
“There are so many of these things — cost-of-living raises, step increase, merit raises, longevity bonuses, whatever you want to call them, you have to start asking: For what?” Sisolak told the Sun. “I talk to people in the private sector who are just happy to keep their jobs, and we’re giving all this money away. We have got to put a tighter rein on this. The county has to get a handle on it.”
The county considered a host of proposals to cut its budget, including streamlining business practices, shifting the burden of providing social service assistance to the state and abandoning licensure of certain types of medical homes and offices.
But then came the hard part — the layoffs.
“It was a very turbulent time for our workforce,” Burnette said. “No one wanted to eliminate positions and we all tried desperately to avoid doing that. But I think Steve understood first and foremost his obligation was to deliver a balanced budget to taxpayers and when the time came to initiate layoffs, it was something that just had to be done.”
Sisolak proudly proclaimed during his State of the State address that he would not raise taxes in his budget. Although his campaign opponent, Adam Laxalt, tried to frame him as a tax-hiker, some of the battles he’s best known for on the commission had to do with resisting tax hikes.
One of the drawn-out sagas during Sisolak’s tenure on the commission was More Cops, a half-cent sales tax increase narrowly approved by voters in 2004. While the first half of the increase took effect in 2005, decision-makers opted to delay the second part of the increase because it was scheduled to take effect in 2009, just as the economy was tanking.
Over the next few years, Sheriff Doug Gillespie tried repeatedly to persuade commissioners to raise the tax in hopes of hiring another 101 officers. Proponents argued that when accounting for the area’s visitors, Clark County had 1.58 officers per 1,000 people, while the average in North America was 2.42 officers per 1,000 people.
But Gillespie could not persuade Giunchigliani, a county commissioner at the time, or Sisolak, a member of Metro’s fiscal affairs committee, who questioned why the department wasn’t drawing more on a hefty reserve account.
“It’s about the trust that people have in Metro and the transparency that they feel Metro either has or lacks,” Sisolak said in 2014 during an interview with conservative talk radio station KXNT.
The tax gained traction later when it was part of a package of bills the Nevada Legislature approved in its effort to lure the Raiders to Nevada. Sisolak, in turn, voted as a member of the commission to enact the tax hike, telling KSNV that many of the most powerful business interests in Las Vegas were on board.
"I got calls from Mr. Wynn, Mr. Murren, Mr. Adelson, Mr. Jenkin, Mr. Ferttita amongst others all emphasizing how important this was," Sisolak said, referring to casino executives.
But the fight against police funding did not win him fans all around.
“He got on fiscal affairs and he tried to bully Metro — he was just a flat-out bully,” said Collins, who has not been shy about his distaste for Sisolak and who helped Sisolak’s opponents in the gubernatorial campaign. “When crime was rising and we need more cops, he pushes back.”
Sisolak was known for drilling into the details when handling commission business, questioning what the county was receiving from its contracts with consultants and why contracts were renewed without going out to an open bid. In one instance, he pointed out that an architect who was the husband of a Clark County civil engineer had won hundreds of thousands of dollars in contracts in an apparent violation of state law.
“He doesn’t drink from the cup that’s given to him by the bureaucrats … he was always skeptical on matters on spending,” Knecht said about their time working together. “He could be a little bit intimidating to some of the bureaucrats. That might be looked at as a real plus to some people.”
His reputation as a fiscal watchdog has influenced how others in his orbit work with him. Tina Quigley, general manager of the Regional Transportation Commission, said she advised her staff to be fully prepared before any meeting with Sisolak because he’s someone who always does his own homework on issues.
“He is not afraid of learning the details and asking the hard ‘why’ questions,” she said.
Sisolak struck Quigley as someone never content with being average and never daunted by confrontation.
“He was a strong leader on the County Commission,” Quigley said. “You never had to guess where he (stood) on an issue. He wasn’t afraid of public and ideological debate. I look forward to seeing him bring that same energy as governor.”
Feud with firefighters
At the height of the recession, Sisolak turned an eye toward county firefighters, who topped the county’s highest paid lists. He told the Sun that the firefighters were “viewed as untouchable” since the 9/11 attacks and that no one at the county had “even contemplated saying no to anything they asked for.”
Sisolak’s feud with Clark County firefighters began in 2009, his first year on the County Commission. He said he received calls and emails from constituents asking why pay or benefit cuts for unionized firefighters, who were making an average of $180,000 a year in salaries, benefits and retirement packages, weren’t on the table in the cost-cutting blitz.
The county considered “brownouts” — taking a fire truck or station out of service on a rotating basis to cut costs — to balance out the high costs of firefighter salaries. When contract negotiations between firefighters and the county stalled, Sisolak sunk his teeth into the firefighters’ sick leave policy, accusing them of gaming the system by calling in sick so their coworkers could make overtime pay.
Brager remembers herself and others speaking up on the issue, but Sisolak received death threats for being vocal — including from a city firefighter who posted on Facebook that she’d like to shoot him — prompting the county to increase security measures at commission meetings.
“It got pretty vicious with some of them,” Brager said. “There were some ugly emails and threats that came out but the board stood strong, he stood strong on that, and he took a lot of heat.”
An arbitrator eventually sided with the county over the union in contract negotiations in 2011, leaving firefighters with a 5.5 percent reduction in total wages and benefits estimated at the time to save county taxpayers $7.4 million. The arbitrator also agreed with the county that firefighters appeared to be treating sick days like vacation days, including one firefighter who called in sick 48 days but worked 92 overtime shifts which allowed him to earn more than $230,000.
As a result of the decision, management was allowed to ask for a doctor’s note if firefighters called in sick more than five times a year. The department immediately saw use of sick leave drop, which Sisolak saw as proof of abuse within the system.
“This is no coincidence,” he told the Sun. “This is a shame. And it’s not everyone, but they are making everyone in the department look bad.”
Even after the decision, Sisolak sent letters to the FBI, Las Vegas Metro and the Clark County district attorney seeking an investigation into whether any firefighters had engaged in racketeering and fraud through the sick leave system. Multiple firefighters were eventually fired or disciplined for their misuse of sick leave.
Ryan Beaman, who was president of the union during the negotiations, and current president Steve Thompson did not respond to requests for comment.
If campaign contributions are any indication, the wounds from that fight have not yet healed. Clark County Firefighters contributed $53,000 to Republican and Democratic candidates this cycle, including five of the six Democratic statewide candidates.
Sisolak, who received more than $50,000 during the campaign from seven other firefighter unions and associations statewide during the campaign, was the lone exception.
Public fights with private business
Sisolak didn’t reserve his ire just for public employee unions, but businesses, too.
He was dubious when Uber tried to make an entree into Nevada before it was regulated, appearing with taxi company representatives and the sheriff at an event in May 2015 to raise concerns about the advent of ride-hailing services. (Taxi and luxury car service companies have donated more than $200,000 to Sisolak’s campaigns since 2011, according to an analysis by The Nevada Independent.)
"We're concerned about the fact that potentially you could put drivers that don't have insurance behind the wheel, that don't have drug tests, that haven't been subjected to training and the vehicles haven't been inspected," Sisolak said at a press conference, which came as the Legislature was deliberating laws authorizing Uber and Lyft.
It was Sisolak who proposed an ordinance requiring drivers with ride-hailing businesses to pay $100 a year in county-level licensing fees, saying they needed to carry their own weight just as other independent contractors do.
"Every business that operates in Clark County, every business, has a business license." Sisolak told KNPR. "And it is unfair for the taxpayers to have to absorb the cost of people who are going to want to operate a business without registering."
In November 2015, the commission also approved a $25-per-year fee for Uber drivers operating in unincorporated Clark County, against the wishes of Uber, which called the fee illegal.
Later that month, Uber emailed its users and drivers, urging them to flood commissioners with messages opposing restrictions on operating at the airport. Sisolak chafed at the campaign, launched after Uber declined to turn over to the county a list of its drivers who would be going to the airport.
“(Uber) hired a lot of high-profile, expensive and powerful lobbyists that will lobby for anyone if they pay them enough money,” Sisolak told the Sun. “I am not willing to succumb to the arm-twisting of their special-interest lobbyists. I’m going to do what I feel is best for the safety of the citizens and tourists of Clark County.”
The power struggle with ride-hailing companies drew criticism from the Las Vegas Review-Journal editorial board, which said the license fees would squelch a burgeoning business and was unnecessary and onerous, given that drivers already paid a $200 annual business license fee to the state and are regulated by the Nevada Transportation Authority.
“Local governments have no role in overseeing either company,” the editorial board wrote. “But local elected officials can’t seem to stand that thought, so they’re agitating for a piece of the pie to help supplement budget shortfalls, while also working on behest of the cab companies to throw a wet blanket on a burgeoning business here in the Las Vegas Valley.”
But Brager characterized the county’s efforts to regulate the ride-sharing companies as an attempt to create an equal playing field between the ride-sharing companies and taxis.
“It can’t be that taxis do one thing and Uber can do whatever it wants,” Brager said. “Steve stuck pretty firm to that.”
Sisolak also got in the middle of a tug-of-war between big casinos and slot parlors such as Dotty’s, a chain of taverns that targets women 35 and older and features a small snack bar and slot machines.
Sisolak sponsored an ordinance that would have required that bars make no more than 50 percent of their revenue from slot-machine gaming, aiming to bring them into compliance with a 2011 law specifying that gambling be only “incidental” at a business and not the dominant activity. Dotty’s viewed it as an attempt to put them out of business, but eventually came into compliance with the law by building out full kitchens in many of their slot parlors.
Craig Estey, owner of Dotty’s, has not made campaign donations to Sisolak since at least 2011, while he and three of his family members gave a total of $40,000 to Sisolak’s Republican opponent, Adam Laxalt, during the 2018 cycle.
By contrast, large casino companies that belong to the Nevada Resort Association — a group that for years has taken aim at the Dotty’s business model — have donated hundreds of thousands of dollars to Sisolak’s campaigns over the years.
Transitioning to Carson City
Although Sisolak got rave reviews from many Democrats after his State of the State speech, he still has some strained relationships on the Democratic side of the aisle.
The no-holds-barred campaign he ran against Giunchigliani in the 2018 Democratic primary has soured the relationship between the two, who in friendlier times used to have dinner at each other’s homes. He poured an eye-popping $6.3 million in 2018 alone in his attempt to bury her campaign ahead of the general election, and the attacks became deeply personal.
Sisolak and his supporters ran ads casting aspersions on the fact that Giunchigliani had paid her husband — respected political consultant Gary Gray — to run her 2006 campaign for commission. The ads cut deep not only because Gray died in an accident in 2015, but also because he ran the 2008 campaign that landed Sisolak his commission seat.
After the hard loss, Giunchigliani said she would not vote for the Republican, but still opted not to endorse in the governor’s race.
“Steve did not need my endorsement,” she explained in a January interview with KNPR. “The base … that went with me were going to go with the Democrat no matter what, number one. Number two, very truthfully, it took him six weeks to pick up the phone to even call me and leave me a message, and I worked down the hall.”
Still, she pointed out that Sisolak will be able to start his term with a budget surplus and Democrats in both houses of the Legislature.
“I would say that the primary was pretty ugly on their part, the lies about my husband was a factor but … I'm a team player no matter what, and I wish Steve well,” Giunchigliani said in the KNPR interview.
Last month, Sisolak announced that he had chosen Giunchigliani to sit on a marijuana advisory panel that will develop a Cannabis Control Board to oversee the industry, and she had accepted.
“It was a difficult primary, but this is about policy, not about politics,” Sisolak said at the announcement event. “Commissioner Giunchigliani was at the forefront of cannabis legalization back in the early 2000s and we spent a lot of years together on the county commission dealing with these issues … I think she’s got a lot to bring to the table.”
In an interview, Giunchigliani said she appreciated the gesture and opportunity to serve on the marijuana advisory panel. She hasn’t ruled out a more cordial relationship with Sisolak in the future.
But Giunchigliani said she has never been afraid to be her own person, even if it meant clashing with her commission colleague at various points.
“He was always prepared,” she said, describing his leadership style. “He did read his information, but he had a tendency to be very controlling.”
Kirkpatrick, another former commission colleague, sees Sisolak’s strong personality differently.
“Any time there’s a hot topic and you’re trying to do what’s in the best interest of the community, you will get some friction and you will get some push back, but that’s a great quality to have,” said Kirkpatrick, who earned a no-nonsense reputation as Assembly Speaker before joining the commission. “I’ve been beat up for that. People think I’m mean, but at the same time they respect that I do my homework.”
Virginia Valentine, who was county manager for the first years of Sisolak’s tenure, said she believes he honed his leadership skills when he moved from being a regular member of the commission to being its chair, with more power to drive the agenda and effect change.
“I think he’s gone from being one vote to having a more collaborative style. He’s reaching out to more people, he’s gathering more information, I think he’s spending more time not on just understanding issues but understanding how others feel about issues and where others are on issues,” Valentine said.
And if Sisolak hasn’t won over all the members of his own party, he counts some fans among Republicans, who see him as someone they can work with. Knecht said he prefers Sisolak over any other Democrat the state might have had.
“The important thing is that he’s not an ideologue, he’s issue driven so that’s why he and I could find some common ground on things,” said Knecht, who says he’s more concerned about where the Legislature will take the state than what Sisolak will do. “If he’s going to rein them in and restrain them, that’s a good thing.”
Jackie Valley and Riley Snyder contributed to this report.