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Glenn Rowley March 1, 2012 COMMS 336 Professor Macfarlane The Case of the Desperate Borrowers Situation Analysis In today's economic climate, many Utahns are increasingly relying on the help of payday lenders. These lending facilities provide high-interest, short-term loans to borrowers unable to qualify for loans from traditional financial institutions. The loans given to customers must typically be paid off within two weeks and charge an average interest rate between 400 and 500 percent annually. With such high interest rates, many borrowers find themselves unable to repay the loans on time, and continually take out more loans to pay back the previous ones. Because of this repetitive borrowing cycle, opponents to payday lending accuse the lenders of engaging in predatory lending practices. In an effort to combat such practices, many jurisdictions in the U.S. have imposed legal restrictions on payday loans. Washington, D.C. and 16 states have banned payday loans altogether, while 27 additional states have set maximum fee limits on lenders. The seven remaining states, including Utah, have no legal fee restrictions for payday lenders. A bill to decrease payday lending to an interest rate of 100 percent annually was defeated in the Utah House of Representatives in 2009 due to opposition from bank lobbyists. Conversely, proponents of payday lending argue that these companies provide financial assistance to borrowers whom are unable to obtain assistance from any other source, and that because these customers are high-risk, the associated interest rates must be high enough to compensate for that risk. The publics who use payday lenders generally include lower income individuals and families – primarily Hispanics. However, as the economic recession has worsened, many lower-middle class individuals and families are increasingly relying on payday lending for financial assistance. Several potential obstacles must be overcome for any new legislation to pass. The 2009 bill being defeated shows there may be a lack of support among voters on the issue. Additionally, bank lobbyists actively opposed to such a bill must be overcome for the legislation to pass. Core Problem There is a lack of support among Utah voters for legislation to set a maximum lending limit for payday lenders. If this is not overcome, payday lending will continue to have no legal fee restrictions and predatory lending practices will be allowed to continue in the state of Utah. Goal To marshal support among voters for legislation to set maximum lending limits for payday lenders to 200 percent annually. Objectives 1. To increase voter support of legislation by 25 percent by the end of the legislative session in March 2012. 2. To have a minimum of 200 people attend the public hearing in support of the legislation. 3. To increase legislative support of the bill to a minimum of 51 percent by the end of the 2012 legislative session.


Glenn Rowley March 1, 2012 COMMS 336 Professor Macfarlane Key Publics & Messages/Strategies & Tactics Public: Lower class Hispanic voters Profile: This public consists of families and individuals in Utah of Hispanic or Latin ethnicity. Generally, they are the primary borrowers of payday loans. Most are immigrants to the U.S. - some illegally – and many have come here in search of a better life. They are generally uneducated and often live paycheck to paycheck due to low income. Their lack of education creates a significant barrier in increasing their station in life. Many are repeat borrowers of payday loans and find themselves trapped by the cycle. However, this group is also unlikely to be actively involved in local or state politics. Their primary self-interest is to take part in the “American Dream” and, by doing so, better their lives. They will help us accomplish objectives one and two. Message: Supporting this payday lending bill will help you be more financially independent and live the life you came to this country to live. Strategy: Using ethnic media, persuade Hispanic voters to actively support payday loan legislation. Tactics:  Place Spanish-language public service announcements on Hispanic television/radio channels featuring influential Hispanic Utahns urging viewers to support the legislation.  Place a video news release on Hispanic television channels about the dangers of payday lending and urge viewers to support the legislation.  Place stories in Hispanic newspapers, such as El Observador de Utah and Mundo Hispano about the importance of the new legislation and how it will positively impact the Hispanic community if passed. Strategy: Persuade Hispanic voters to actively support payday loan legislation through face-to-face communication with influentials. Tactics:  Host rallies supporting the legislation featuring influential speakers within the Hispanic community.  Place a booth regarding the legislation at events within the Hispanic community, such as the Festival Latinamericano in Provo and Latino Day celebrations throughout the state.  Have influentials go door-to-door with petitions supporting the legislation in Hispanic communities. Public: Lower-middle class families Profile: This public includes Utah families who socioeconomically belong to the lower-middle class. In the past, this group was not the primary target of payday lenders. However, as the economy has worsened since 2008, they have increasingly utilized payday loans for financial assistance. They


Glenn Rowley March 1, 2012 COMMS 336 Professor Macfarlane typically have fairly limited education such as a high school diploma, two-year degree or certificate from a trade school. Their primary self-interest is taking care of their families and remaining financially stable. They're also concerned with getting out of the cycle of debt using payday lending has forced them into. This public will help us achieve objectives one and two. Message: Supporting payday lending legislation will help you get back on your feet financially, get out of debt and take care of yourself and your family. Strategy: Persuade lower-middle class families to support payday loan legislation through mass media. Tactics:  Place a public service announcement featuring working-class individuals talking about how the legislation will help and encourage viewers to contact their local representative.  Distribute pamphlets in lower-middle class neighborhoods educating readers about the benefits of the legislation, with a prepaid mailer to fill out and send in to local legislators.  Place a radio interview with an influential such as Linda Hamilton of the Coalition of Religious Communities explaining the legislation and how listeners can support it on local early-morning radio stations during the commute to work. Public: Local civic, social service and religious leaders Profile: This public consists of leaders within civic government, religious communities and the social services sector. These leaders will mainly function as an intervening public for other publics affected by the legislation. However, since this is a political issue, it is likely that they will require persuasion to get involved. While they themselves generally do not use payday lending, this public is left to clean up the mess created by the consequences of predatory lending practices on their constituents, congregations and clients. Their primary self-interest is altruistic – they legitimately want to help the people depending on them. People in these types of leadership positions are generally extremely passionate about their work and service to others. This public will help us accomplish objectives one and two. Message: Help the victims of predatory lending within your community escape the cycle of debt by encouraging them to support legislation restricting payday lending. Strategy: Persuade community leaders to support payday loan legislation and rally those they lead to do so as well through intra-organizational communication. Tactics:  Distribute newsletters to each organization about the legislation and asking for their help in supporting it.  Deliver a statement asking for support of the legislation at church group meetings, staff meetings and civic meetings.


Glenn Rowley March 1, 2012 COMMS 336 Professor Macfarlane  Have a proponent of the legislation personally call each leader asking for their support. Public: Utah legislators Profile: This public consists of the 75 representatives in the Utah House of Representatives and the 29 State Senators in the Utah Senate. Both legislative bodies are primarily Republican, however a minority of Democrats also exists. While they represent districts throughout the state of Utah, most legislators are upper or upper-middle citizens who don't use payday lending. Their primary self-interest is to fairly represent their constituents, however aligning with members of their party is also a chief concern. Another self-interest is to better the future of Utah's citizens. This public will help us accomplish objective three. Message: Supporting payday lending legislation is the best decision for your constituents and the future of Utah economy. Strategy: Persuade legislators to support a bill restricting payday lending through print media. Tactics:  Place an editorial in major Utah newspapers, including the Salt Lake Tribune and the Deseret News, about how the predatory lending practices of payday lenders are negatively affecting legislators' constituents and Utah's economy.  Place letters to the editor in major Utah newspapers regarding unethical lending practices and how restrictive legislation would positively affect Utah citizens. Strategy: Persuade legislators to support a bill restricting payday lending through personal communication. Tactics:  Institute a letter-writing campaign by proponents of the legislation urging their representatives to support the bill.  Have proponents of the legislation make daily phone calls to legislators' offices asking them to support the bill.  Have proponents discuss the legislation at regular community meetings with legislators (in person or by phone). Public: Lobbyists for state agencies and special-interest groups Profile: This public consists of professional lobbyists working at the Utah Legislature for various state agencies in Utah. They represent the interests of many different special-interest groups and official state agencies within the state, and work with legislators to see those interests realized. Many were possibly in support of the bill that was defeated by bank lobbyists in 2009. Their primary self-interest is successfully representing the interests of the organization for whom they are lobbying. This public will


Glenn Rowley March 1, 2012 COMMS 336 Professor Macfarlane help us achieve objectives two and three. Message: Lobbying in favor of payday lending legislation is in the best interest of your organization and the citizens of Utah. The 2009 bill was defeated by bank lobbyists, so this time we need stronger lobbying in favor of the modified bill to ensure it gets passed. Strategy: Persuade lobbyists to lobby in favor of the legislation through personal communication. Tactics: ďƒą Have proponents of the legislation personally contact lobbyists, explain the modifications to the new bill and ask for their support. ďƒą Have lobbyists already in favor of the legislation personally persuade other lobbyists to join them. ďƒą Appeal directly to relevant organizations represented by the lobbyists to support the bill.

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