Calls on Lieutenant Governor Brian Benjamin to get rid of shares of high interest loan companies as he takes the oath

September 10, 2021

On the day he was sworn in as Lieutenant Governor, Brian Benjamin withdrew from any affairs of state that might raise conflict of interest issues in the wake of THE CITY report detailing his important actions in a high interest loan company.

The revelations about the action earned Benjamin an explosion of criticism on his big day from two Albany lawmakers – including one who called on the former state senator to immediately sell his shares.

“He must step down,” Assembly member Yuh-Line Niou (D-Manhattan) told THE CITY on Thursday after Benjamin’s inauguration. “He could be the hero here and walk away and say it’s not a product that he supports and say it out loud. That these kinds of products are dangerous.

“He didn’t and I’m worried about that,” she added.

Niou questioned Benjamin’s ownership of shares in NextPoint, a group of investors that recently acquired LoanMe, a company that arranges small personal loans with exorbitant interest rates of up to 500% and which has been repeatedly sued by borrowers and consumers.

THE CITY estimates that its initial investment of $ 4,100 last year is now worth close to $ 85,000. Critics have accused Benjamin, who was called upon by Gov. Kathy Hochul for his former job, of trying to cash in on an industry that has left vulnerable borrowers with crushing debt.

Assembly Member Ron Kim (D-Queens) tweeted “Not good”, while Niou tweeted, “No one should agree with the predatory loans that are bleeding our communities.”

Benjamin on Thursday told THE CITY he had “signed a recusal” – but declined to release the document or discuss its terms.

In response to questions from a New York Times reporter about the shares during his swearing-in on Thursday, Benjamin declined to discuss his role as a member of the board of directors of NextPoint in approving the acquisition of LoanMe or to comment on the tactics of this company.

Instead, he issued a statement in broad terms: “My record speaks for itself. I wholeheartedly support the crackdown on extremely high interest rates – especially because many people who take out these loans are using them for mortgages, rent assistance and other housing costs. . I worked hard to solve our affordable housing problem in New York City. “

Lots of pursuits

As THE CITY reported on Tuesday, Benjamin and his colleagues on the NextPoint board of directors secured stock in the company last year with an estimated investment of $ 4,100 to pennies a share.

He resigned from the board of directors on March 15, while running for the post of city comptroller, but kept his stock. When the company went public on July 7, it opened at $ 11.12 a share and closed at $ 8.50 on Wednesday. This would mean that Benjamin’s shares are now worth around $ 84,000.

Benjamin has yet to define his role as a member of the board of directors in Nextpoint’s decision to acquire LoanMe. NextPoint announced that it had “entered into definitive agreements” to acquire LoanMe and another company, Liberty Tax, on February 22, while Benjamin was still on the board of directors.

The Daily News reported that he told the newspaper’s editorial board in early May that he was “no longer affiliated in the future” with LoanMe and Liberty Tax – but he did not mention his holdings of shares.

Brian Benjamin /Hiram Alejandro Durán / THE CITY

Benjamin spokesperson Jordan Bennett wrote in an email to THE TOWN that the new lieutenant governor “has no leadership role with NextPoint or its subsidiaries – he owns shares but he is not a shareholder majority, not a director, and has no substantial control. on the company or its subsidiaries.

He noted that LoanMe has no business in New York City, which caps interest rates on most consumer loans at 16% and considers rates of 25% or more criminal.

“While it is difficult to imagine a scenario where the Senator could have an impact on this particular matter of his role as Lieutenant Governor, to avoid even the appearance of a conflict, he will completely withdraw from any decision that could have such an impact. impact, ”Bennett said.

The other company acquired by NextPoint, Liberty Tax, “has limited business operations in New York State consisting of a few franchise locations. These locations are not owned by NextPoint, but are instead set up as franchises with private owners, ”Bennett said.

By the time NextPoint reached its “final deal” to purchase LoanMe earlier this year, the company had been repeatedly sued by borrowers and consumers for carrying out a wide variety of deceptive and harassing behavior. THE CITY has found 33 federal lawsuits filed against LoanMe since 2015 in seven states.

Borrowers accused LoanMe bombarded them with text messages and automated calls if they were late in their payment, while consumers accused the company of the same type of harassing calls to solicit their business. Some borrowers have claimed that LoanMe provided wrong information which ruined their credit.

Last week, LoanMe settled all but two of the lawsuits. The terms of the settlements remain sealed.

This story was originally posted on September 9, 2021 by LA VILLE. Sign up here to receive the latest stories from THE CITY every morning.

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