Revenue boss, like Beshear, a payday lender ally

New appointee Tom Miller resigned in '05 over industry-friendly bill

Gov. Steve Beshear, a former lobbyist for Kentucky's payday loan industry, has named as his new Revenue Department commissioner a veteran banker who abruptly resigned from Gov. Ernie Fletcher's administration during a controversy about his writing favorable legislation for the payday loan industry.

Beshear on Tuesday announced the appointment of Tom Miller of Louisville as revenue commissioner, to replace the departing William Cox Sr. The Revenue Department oversees state tax collection and property valuation.

During the 2005 General Assembly, while he was Fletcher's commissioner of financial institutions, Miller pushed a lending deregulation bill before lawmakers. Among other things, the bill would have doubled the legal limit on the size of payday loans in Kentucky, to $1,000. The Kentucky Deferred Deposit Association -- the payday lending industry trade group that employed Beshear in the 1990s -- helped Miller and his staff draft that section of the bill.

"They said, 'Is there anything of interest to you?' So we laid out a couple things, including the increase in the maximum advance (payday loan) amount)," said John Rabenold, a spokesman for the Deferred Deposit Association, at the time.

After the Herald-Leader reported on that part of the bill, and consumer advocates protested in Frankfort, the House of Representatives stripped out that section without debate. Within hours, Fletcher distanced himself from the payday lending proposal and said Miller included it against his direct orders. Fletcher said he was surprised to read in the newspaper that Miller was pushing the measure as part of an administration bill.

"Perhaps (Miller) thought he had clearance to move on this aspect, when he did not," Fletcher spokesman Doug Hogan said at the time.

A few days later, Miller's resignation was announced by the Fletcher administration, with no comment offered.

When Beshear named Miller to head the Revenue Department this week, the governor's press release said Miller "most recently served as Market President Louisville for Community Trust Bank." It briefly referenced Miller's "two different stints with the Department of Financial Institutions."

Miller did not respond to a request for comment Thursday morning. Beshear spokesman Dick Brown said he could not immediately comment.

A consumer advocate who helped defeat Miller's payday loan proposal in 2005 said he doesn't know the man personally, so he'll try to keep an open mind.

"One would hope that he's going to be public-spirited and weigh the public's interests as well as any other interests," said Richard Seckel, director of the Kentucky Equal Justice Center in Lexington. "Our concern is always that something will slip by under the radar that could hurt low-income consumers."

-- John Cheves

Update, 3:55 p.m.: Beshear spokesman Dick Brown just e-mailed the following response from Beshear. The governor defends Miller's role in the failed payday lending bill, but he does not address the circumstances under which Miller abruptly resigned his job the last time.

Brown writes: "This is the response to your posting from Gov. Beshear:

“The assertions are ridiculous, both about Mr. Miller and me. In fact on March 20, 2008, I issued a news release in which I praised the passage of HB 500, sponsored by Rep. Johnny Bell, as an 'excellent move toward good consumer legislation for citizens of the commonwealth.'

"Regarding Tom Miller - during his tenure as head of the Office of Financial Institutions under my predecessor’s administration, Tom Miller was asked to testify on legislation that was sought by the financial industry. Tom did not write the legislation nor did he push for it, as the Herald-Leader has asserted, but rather was asked to testify before a legislative committee by virtue of his chief regulatory role."

"As anyone who is educated about the legislative process knows, rarely does a bill make it from conception to birth without alteration and sometimes basically good bills include some unwanted provisions that are weeded out during the session. This bill included many necessary housekeeping measures sought by OFI and others that were sought by the industry that Tom Miller knew were unlikely to gain legislative support.

"To say that Tom Miller was solely responsible for one provision of a failed legislative proposal sought by the financial services industry is untrue and unfair. And to categorize the legislation as 'Miller's payday loan proposal' is manifestly absurd.”

Comments

[The one thing Fletcher did poorly]

The one thing Fletcher really messed up at was not any alleged hiring of Republicans for merit job. It was keeping all those Democrats and/or hiring Democrat loyalists for those non-merit jobs.

The fact that someone who served as a non-merit under Fletcher could so easily move into a highly-placed non-merit position under Beshear shows that there was no loyalty to Fletcher and his priorities in the beginning, as the deal with the payday loan legislation reflects.

Fletcher should have fired EVERY non-merit, from commissioner on down to executive secretary, within a week after taking office. Surely there was a loyal Republican banker (besides Mike Duncan, of course, who was busy doing other things) who could have served as commissioner of financial institutions.

[Jim Anderson Stivers]

While this appointment is certainly legal, it does have a "taint" to it. Jeez, the more we work for CHANGE. The less results voters get.

I did some research on this economic issue a time back, when Steve Beshear was in the Primary. And noted his lobbying for the Pay Day Lenders.

There is a place in our economy for this type of secured quick loan . . . with the current limit of $500 it limits the obligation of the borrower- to the extent- he can not become suspect for a future loan with Predatory type structure.

Leave it at $500.00

[Bill Adkins]

I'll wait and see -- but I cannot condone predatory lending of this type. I opposed it when Geoff Davis protected it for his benefactors and I'll oppose it without regard as to who supports it. It's an extension of that abuse committed by the credit card companies and by those entties that mangled the bankruptcy laws in 2005.

[Payday Loans]

Payday Loans are good when you are in a bind and need to catch up on your bills, they are quick, easy, and confidental.

[Joe]

Tom Miller was an asset to Financial Institutions, his replacement was not, the current Commissioner and Deputy Commissioner are both Flether appointees. What ashame he is still allowing the past administration to still run his government.

[Borrow 200, pay back 203]

Borrow $200, pay back $203. What's predatory about that?

Banks don't want to do short term loans for small amounts of cash. There is a need for that service. Someone needs to step up and do that type of business.