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Billy Cunningham
Billy Cunningham
Attorney • (800) 574-4332

Nursing Homes Owners: Care Givers or Money Grubbers?

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While we have learned about nursing home owners and operators setting up sham corporations to own property, rent facilities, ‘manage’ nursing, and ‘consult’ with nursing homes allowing them to rake in money, I never thought I would see them scoop so low as to rip off their own underpaid employees. But more than 90 Missouri nursing homes figured it out by making payday loans to their own employees at high interest rates, then deduct payment of the loan, interest and fees from the workers’ next paychecks!

The Better Business Bureau exposed this outrage on Tuesday. The reaction was swift and overwhelming. Missouri Gov. Matt Blunt announced: Nursing home operators will no longer be allowed to operate on-site payday loan operations that lend money to the nursing homes’ employees. Good for him. Those owners should be ashamed. Those of you old enough will remember that old Tennessee Ernie Williams song “16 Tons” where he laments that he loaded 16 tons of #9 coal, was another day older and deeper in debt. He cried “St. Peter, don’t you call me cause I can’t go- I owe my soul to the company store.” This practice is no different.

Before Gov. Blunt jumped in Missouri had 971 nursing homes and about 60 of them were operating payday loans in the facilities. While the arrangement may be legal, the BBB questioned the ethics of employers making money off the wages of their workers. Questioned? How about flat out, no excuse unethical. Let’s see. I want you to work a double shift because you owe us money and also it will keep us from having to hire more caregivers. Before the governor intervened, Missouri payday loan lenders could charge an annual percentage rate, or APR, of up to 1,950 percent on two-week payday loans. A spot check by the BBB found that one nursing home charged an APR of 912.5 percent, another charged 365 percent and a third charged 304 percent. Then to make sure they collect these outrageous fees, the lender is able to deduct the loan, interest and fees straight from the paychecks of nursing home workers, the BBB said.

The Better Business Bureau released the names of two allied groups of 62 nursing homes who hold payday loan licenses. Principals in the two groups are James and Judy Lincoln of Sikeston; Mathias Dasal of Eldon; Gary Crane of Rogers, Ark.; and Timothy Drake of Pascagoula, Miss. The lone director of the third group, with 30 nursing homes, is Don Bedell of Sikeston. The BBB said Bedell is also the sole director of a payday loan company that has licenses at those nursing homes.

A spokeswoman for the Community Financial Services Association, a national trade association for the payday loan industry, said she was unaware of any other states with a similar arrangement between nursing homes and payday loan operators. Well, look out for them. If you know of this practice going on in your state, contact someone and let’s get this stopped now!