The business of nursing homes is nursing, not loans.
Nursing homes shouldn’t be in the business of making high-interest loans to their workers. But in Missouri, more than 90 of them are. They routinely charge annual interest rates exceeding 300 percent. In one case, workers are charged a jaw-dropping 912.5 percent.
That’s absurdly high, but not as high as it could be. Missouri law allows payday loan companies to charge fees and interest of as much as 75 percent of the original loan amount — 1,950 percent on a two-week loan. That’s the highest allowable rate in any of the 43 states that have capped payday lending interest rates or banned payday lending entirely.
With rates like that, workers would be better off taking high-interest cash advances from credit cards. But economists have found that many payday loan borrowers don’t fully appreciate just how much they’re paying.
Here’s the best part, at least for nursing home owners: Payments are deducted directly from workers’ paychecks. That makes borrowing easier and repayment all but certain.
Nursing home payday loans are anything but rare. Officials at one nursing home with 100 employees told the Better Business Bureau that they make 12 to 15 loans per day; another with 63 workers makes eight or nine loans a day.
Three years ago, then-Gov. Matt Blunt vowed to shut down payday loan operations in Missouri nursing homes. “Employers should not be making a profit off the wages they pay their hard-working long-term care facility employees,” he said.
At the time, 74 nursing homes were loaning money to their workers. Today, the Better Business Bureau says at least 90 offer the loans.
Our colleague Jim Gallagher reported in Sunday’s Post-Dispatch that in the wake of Mr. Blunt’s promise, state officials worried that they didn’t have the legal authority to close the payday loan operations. Instead, they negotiated a settlement that allows nursing homes to continue offering payday loans to workers.
But instead of doing face-to-face transactions, they must do it by computer. That’s no solution. By making their workers apply online, nursing home owners and the payday loan companies that they operate avoid any state regulatory oversight.
Average pay for aides in Missouri nursing homes was $10.13 an hour in 2008 — roughly $21,700 a year. Many get no health benefits.
They have difficult, sometimes unpleasant jobs. These are the people who dress, feed, clean and sometimes diaper elderly people whose families can’t or won’t care for them.
Not surprisingly, finding enough applicants to fill those jobs is a perpetual struggle for many nursing homes.
A century ago, miners and factory workers were forced to pay high rents to live in company housing. They shopped in company stores that gouged them with high prices. When pay day came, many found themselves owing more than they made. Their debts kept them indentured to dangerous or unpleasant jobs.
Those days are supposed to be long gone. But there are uncomfortable echoes of those practices in the nursing home payday loan operations.
When he was attorney general, Gov. Jay Nixon criticized the payday loan industry as “legal loansharking.”
Mr. Nixon should find common ground with Republican lawmakers who shared Mr. Blunt’s revulsion. They should end payday lending
Overcrowded prisons? I have the solution! Place inmates in nursing homes along with the corrupt nursing home corporation officers who make poor decisions that kill patients and aren’t punished. Like what Sun Healthcare Group did to my mother in a Newport Beach, Calif facility:
Even with double pneumonia, SUN didn’t care about my mother’s health, I found they still forced her up and dressed by 5:30am -made to sit in her wheelchair in the hallway waiting for breakfast at 8:00 am, b cuz SUN understaffed and simply put, 5-7 CNAs cannot dress 59 patients in one hr from 7-8 am so she was one of the chosen to suffer early in the morning in this manner -while very sick; constant thirst? Sure, nurses will be back in a few hours; U need a bathroom? no walking u 2 the toilet, we use diapers here; Hungry? wait ’til you eat the great food; Need a Dr.? call 911; Sunday afternoons understaffed, call family for help and transfer to local acute care hospital for comfort; Fever? Thermometers broken; Hot? HVAC condemned; Cold? HVAC condemned; Can’t breathe? No ventilation n here, did I tell u the HVAC is condemned?; BTW Oxygen runs out regularily, & no staff to monitor it; Looks like u had a stroke? opps, R b/p equip. broken and now you can’t swallow for the remainder of your life, so sorry; Opps, now u Got the superbug MRSA that is antibiotic resistant? opps so sorry once again, and gee, this time you die. We’ll cheat ur family out of proper compensation for wrongful death ‘cuz we know ur attorney real well and he’ll threaten u in mediation 4 us that we can ruin u if u bring this case to trial, even tho u can prove r willful misconduct becuz no one really cares about an old lady dying in a nursing home from the fault of management. This isn’t sexy news.
Opps, Medical Director Dr Scott Stoney decides to do the right thing and testify, he has a conscience and declares SUN RESPONSIBLE FOR THE DEATH OF EVELYN CALVERT in 2006. Yep, he can and will be subpoenaed by attorneys in other death cases against SUN. There is a God!
Sun Healthcare Group out of New Mexico did all of the above to my mother. Beware they operate over 200 nursing homes throughout the USA in various names other than SUN.
Deborah Calvert, Newport Beach, Calif
It is an odd business combination, but should it be outlawed? If the payday loan business is a legal business, then what’s the problem? People make their own choices, and suffer the consequences or enjoy the benefits of the choices they make.
Nobody is forcing anyone to be a nursing home aide. It is a choice. As for health insurance, the government has pretty much taken away individual choice to obtain competitive health insurance — but there are individual plans to be had.
If you are looking for strange bedfellows, look toward your beloved federal government:
* The US Government should not be running car companies
* The US Government should not be running loan companies
* The US Government should not be running banks
* The US Government should not be an insurance company
* The US Government should not be deciding what money people can make
* The US Government should not be a wealth redistribution machine
The US Government should govern and protect our sovereignty.
Loan sharking is a social evil that should be deterred. People that use payday loan establishments are being victimized by an unreasonable system. To put it plainly if their job does not afford them a reasonable standard of living it should be done away with. There is no reason in this economy or any first world economy for employees to suffer. Prevailing wage laws need to be upheld, housing should be affordable, and the minimum wage should be raised. To many people live with the burden of the rich this burden should be lifted if not by the rich by government. Why should we shoulder a burden for people that make millions yearly. Do we need them that much? I venture to say we do not need them at all they need us.
Deborah, not trying to be callous, but if you knew all of those things were happening to your mother, did you try to do anything? Did you look to move her out of the situation?
I think that if my mother were in an inadequate facility, I would do everything in my power to remove her.
An MBA huh? Could have fooled me.
Think, i agree with you. with all the finance industry drama that has gone on over the past two years, including the housing crisis, it’s time for people to be responsible for their own actions and get their own lives on track. if you take out a loan, you should do so with the ability to pay it back. ON TIME.
Mullarkey,
Assuming that you really have an MBA, why did you bother with it? Sounds like you wish to do away with capitalism and individual achievement. Your suggestions would stifle innovation and drive up the cost of doing business. Did you barely get passing grades to get that degree? Everybody has a choice. They can work at a place or not. Nothing is holding them there. If nobody takes the job, then the demand for the job goes up along with the wage. If instead, you are going to drive your business based on envy, then your business will sink towards the bottom, your employees will lose their jobs and you will blame those that succeeded for your failure.
Go back and take some refresher courses.
It seems like a crime. Especially with all the loan companies around that will loan for less. I am using a payday loan to bridge a gap between tuition due and payday.
I uses a payday loan. It wasn’t with a nursing home & I didn’t have any problems paying back. This operation gives payday loans a black eye.