Stephen Ross: House District 63 Alamance County

In a series of Real Facts NC reports examining key North Carolina legislators, we look at Representative Stephen Ross, who has represented Alamance County in the North Carolina House since 2013. Ross is currently the Deputy Majority Leader of the Republican House Caucus. Ross previously served as Mayor of Burlington and on the Burlington City Council. As a Vice President and an Investment Officer for Wells Fargo, Ross has used his three terms in the House to put the interests of banks, predatory lenders, and developers above North Carolina families. Ross has voted for measures that enhance the profits of predatory consumer finance companies and trap low-income people in a cycle of debt. In his 2012 campaign, Ross called for major regulatory reform to make the state competitive; however, he has instead made North Carolina competitive for his special interest donors and those who seek to prey on the most vulnerable.

Summary

• Stephen Ross is a Vice President and Investment Officer with Wells Fargo and has received at least $25,500 in PAC money from the financial services industry since 2012.

• Amid an uncertain economic recovery in 2013, Stephen Ross

voted to enhance the profits of predatory consumer finance companies as they further trapped low-income people in debt.

• Stephen Ross voted for a bill that helps companies sell high-

interest rate consumer loans, even after multiple warnings about these lenders to consumers from the Attorney General’s office.

• Stephen Ross voted for a bill that eliminated a formal track for

homeowners to protest development in their communities.

• In 2013, 14,955 tax filers in Alamance county claimed the state Earned Income Tax Credit, which lawmakers allowed to expire that year. The tax credit went to people that worked but earned low wages, and the benefits totaled $1,668,976 in the county.

North Carolina Legislator Profile

“We need comprehensive tax reform along with major regulatory reform to become competitive again.” – Stephen Ross

Rep. Stephen Ross

NC House District 63

Alamance County Statistics Poverty and Economic Hardship

• 18.9% of county residents (29,039 people) lived in poverty and struggled to make ends meet in 2015; the state poverty rate was 16.4%. (US Census Bureau, Small Area Income and Poverty Estimates, 2015, Budget and Tax Center, Retrieved 10/2/17)

• 26.1% of children in the county (9,265 children) lived in poverty in 2015, compared to 23.4%

statewide.4 (US Census Bureau, Small Area Income and Poverty Estimates, 2015, Budget and Tax Center, Retrieved 10/2/17)

Educational Attainment

• The graduation rate for this county was 81% compared to the state rate of 85.6% in 2015-16. (NC Department of Public Instruction, 4-Year Cohort 2015-2016, Budget and Tax Center, Retrieved 10/2/17)

• 21.6% of adults in this county had a Bachelor’s degree or higher compared to 28.4% statewide on

average from 2011 to 2015. (US Census Bureau, American Community Survey, 2011-2015, Budget and Tax Center, Retrieved 10/2/17)

Medicaid Expansion

• 32,062 people in the county were eligible for Medicaid in December 2016, an increase of 71.1% since December 2007 when the recession began. Estimates suggest that 7,863 North Carolinians in the county would benefit from Medicaid expansion, delivering $290.3 million in economic benefits to the county. (NC Division of Medical Assistance, December 2007 and 2016; and Cone Health Foundation. “The Economic and Employment Costs of Not Expanding Medicaid in North Carolina: A County-Level Analysis.” December 2014, Budget and Tax Center, Retrieved 10/2/17)

Work and Income Supports to Avoid Poverty

• In 2013, 14,955 tax filers in the county claimed the state Earned Income Tax Credit, which lawmakers allowed to expire that year. The tax credit went to people that worked but earned low wages, and the benefits totaled $1,668,976 in the county. These were dollars that helped workers make ends meet by allowing them to keep more of what they earned to support their children. (Special Data Request, NC Department of Revenue, Preliminary Run of 2013 Individual Income Tax Extract, Budget and Tax Center, Retrieved 10/2/17)

Stephen Ross is a Vice President and Investment Officer with Wells Fargo and has received at least $25,500 in PAC money from the financial services industry

Stephen Ross is a Vice President and Investment Officer with Wells Fargo Advisors. (NC General Assembly, Retrieved 10/11/17) Stephen Ross has received at least $25,500 in PAC money from the financial services industry since 2012. (NC State Board of Elections, Retrieved 9/18/17)

PAC Date Amount NATIONWIDE CAROLINA PAC 10/31/16 $1,000 NORTH CAROLINA BANK PAC 10/31/16 $1,500 CREDIT UNION PAC OF NC 10/04/16 $250 BRANCH BANKING & TRUST OF NORTH CAROLINA PAC 4/13/16 $2,000 WELLS FARGO AND COMPANY PAC 03/11/16 $1,000 NATIONWIDE CAROLINA PAC 03/1/16 $1,000 NORTH CAROLINA BANK PAC 12/10/15 $1,500 NC BANK PAC 12/17/14 $1,000 BANK OF AMERICA STATE AND FEDERAL PAC 10/24/14 $750 NATIONWIDE CAROLINA PAC 10/15/14 $2,000 BB&T NC PAC 09/18/14 $2,000 NC ASSN OF INSURANCE & FIN ADVISORS PAC 09/16/14 $1,000 RESIDENT LENDERS OF NC PAC 08/26/14 $250 WELLS FARGO & CO NC EMPL PAC 05/1/14 $1,000 CREDIT UNION PAC OF NC 04/17/14 $250 NATIONWIDE CAROLINA PAC 03/24/14 $1,000 NC BANK PAC 12/20/13 $1,000 BANK OF AMERICA STATE AND FEDERAL PAC 11/13/13 $1,000 NC BANK PAC 12/26/12 $500 NATIONWIDE CAROLINA PAC 10/29/12 $500 WELLS FARGO PAC 10/18/12 $1,000 BB&T PAC 10/17/12 $4,000 Total $25,500

Amid an uncertain economic recovery in 2013, Stephen Ross voted to enhance the

profits of predatory consumer finance companies as they further trapped low-income people in debt

Ø Stephen Ross voted for S489. (S489, signed by Gov. 6/19/13)

Senate Bill 489 raised the cap on consumer finance loans from $10,000 to $15,000. “Consumer finance loans currently are capped at $10,000, but the bill would raise the maximum to $15,000. The bill also would lower the maximum interest rate from 36 percent to 30 percent, although critics carp that the current maximum applies to few loans because it’s limited to loans of no more than $600.” (News & Observer, 5/30/13)

Senate Bill 489 called for a 30 percent interest on loans of $4,000 or less “with the rate lowered to 24 percent for an additional $4,000 and lowered again to 18 percent for the next $2,000. So a $10,000 loan would blend three rates.” “The amended bill calls for a 30 percent interest rate on loans of $4,000 or less. For larger loans, 30 percent still applies to the first $4,000, with the rate lowered to 24 percent for an additional $4,000 and lowered again to 18 percent for the next $2,000. So a $10,000 loan would blend three rates. In addition, loans from $10,001 to $15,000 would carry a flat 18 percent rate for the entire amount.” (News & Observer, 5/30/13) Al Ripley, director of the N.C. Justice Center’s consumer and housing project said, “These rate and

fee increases are going to cost consumers millions while making these loans harder to pay off, trapping even more people in debt.”

“These rate and fee increases are going to cost consumers millions while making these loans harder to pay off, trapping even more people in debt,” said Al Ripley of the Justice Center’s Consumer & Housing Project. “These rate and fee increases are going to cost consumers millions while making these loans harder to pay off, trapping even more people in debt,” said Al Ripley of the Justice Center’s Consumer & Housing Project. “This bill moves North Carolina in the wrong direction. As a matter of public policy we should be addressing the predatory aspects of these loans rather than making them more expensive. (Citizen-Times, 5/2/13)

Consumer finance companies were “going to make so much money” on larger loans, said Al Ripley, director of the N.C. Justice Center’s consumer and housing project. “Al Ripley, director of the N.C. Justice Center’s consumer and housing project, said the consumer finance companies don’t care about giving up the 36 percent rate on their smallest loans “because they are going to make so much money” on larger loans.” (News & Observer, 4/15/13) With estimates that Senate Bill 489 would cost North Carolina borrowers $50 million to $70 million more in interest costs, Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending said, “Raising interest rates now, especially while whatever economic recovery we have isn’t taking full hold, is just not a good policy decision.” “There’s a formidable number of people on the bill,” said Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending in Durham. “We hope that legislators will understand that raising interest rates now, especially while whatever economic recovery we have isn’t taking full hold, is just not a good policy decision.” Kukla estimates that the bill would cost North Carolina borrowers $50 million to $70 million more in annual interest costs if it becomes law. (News & Observer, 4/15/13) “66 percent of the loans made by the industry in 2011 were to consumers in North Carolina who already had a consumer loan. That shows that many people can’t really afford to pay off their loans and are caught in a cycle of borrowing.” “Ripley added that, based on data from the state banking commissioner, 66 percent of the loans made by the industry in 2011 were to consumers in North Carolina who already had a consumer loan. That shows that many people can’t really afford to pay off their loans and are caught in a cycle of borrowing, he said.” (News & Observer, 4/15/13)

The bill was opposed by the state Department of Justice because it would “further exacerbate debt problems among low-income people.” “Those changes weren't enough for Laura Collins Britton, a law professor at the University of North Carolina specializing in consumer financial transactions. In practice, she said, desperate people look to installment loans to refinance another debt and get caught in a spiral because the new loan barely covers what they already owe and comes with additional insurance costs that dupe many consumers, she said. The state Justice Department also opposes the bill, arguing what remains of the industry is growing without new costs that could further exacerbate debt problems among low-income people.” (Associated Press, 5/30/13)

“The consumer-finance industry spent more than $1.8 million to hire at least 20 lobbyists and push a flood of donations to political leaders.”

“According to an Associated Press report, the consumer-finance industry spent more than $1.8 million to hire at least 20 lobbyists and push a flood of donations to political leaders.” “How did they get it? Easy. They bought it. According to an Associated Press report, the consumer-finance industry spent more than $1.8 million to hire at least 20 lobbyists and push a flood of donations to political leaders. House Speaker Thom Tillis got $30,000. Senate leader Phil Berger and Gov. Pat McCrory also enjoyed the group’s largesse.” (Fayettevile Observer, Editorial, 6/16/13) “Anyone who doesn’t believe North Carolina government is for sale to the highest bidder should look at how the consumer-finance industry won the right to raise its already-astronomical interest rates.” “Anyone who doesn’t believe North Carolina government is for sale to the highest bidder should look at how the consumer-finance industry won the right to raise its already-astronomical interest rates. Despite the near-record-low cost of money and a barely there prime rate, lending companies that specialize in loans to low-income and credit-challenged customers may soon be able to charge 30 percent interest on the first $4,000 borrowed and even more in fees and insurance charges. That’s not much less than Big Louie the Bone Snapper gets down on the street corner.” (Fayettevile Observer, Editorial, 6/16/13) The NC Commissioner of Banks recommended there not be changes to the Consumer Finance Act,

“either to enhance revenue or increase consumer protections.” After an extensive study requested by the General Assembly, the NC Commissioner of Banks said, "In light of the foregoing findings and after careful consideration of the following report and submissions from meeting participants, the Commissioner does not recommend any changes in the CFA [Consumer Finance Act], either to enhance industry revenue or increase consumer protections." “An extensive General Assembly-requested study from the NC Commissioner of Banks found that there was and is no need to raise the cost of loans. As the Commissioner told the General Assembly: "In light of the foregoing findings and after careful consideration of the following report and submissions from meeting participants, the Commissioner does not recommend any changes in the CFA [Consumer Finance Act], either to enhance industry revenue or increase consumer protections." (Thomasville Times, Rob Schofield Op-Ed, 4/10/13) Stephen Ross voted for a bill that helps companies sell high-interest rate consumer

loans even with multiple warnings about these lenders to consumers by the Attorney General’s office

Ø Stephen Ross voted for H140. (H140, veto override, 8/24/17)

In a bill that had previously been focused on dental care and “on the last day of this year’s regular session, lawmakers inserted an unrelated provision that would help companies that sell high-interest-rate consumer loans.” “A proposal opposed by consumer advocates is a step away from becoming law after the state House voted Thursday to override Gov. Roy Cooper’s veto. House Bill 140 started out with a focus on dental care. But on the last day of this year’s regular session, lawmakers inserted an unrelated provision that would help companies that sell high-interest-rate consumer loans.” (News & Observer, 8/24/17) House Bill 140 expanded “the types of loans that companies can add insurance to,” which is an extra payment on top of the loan to protect the borrower in an emergency. “Those lenders often sell something called credit insurance, which is an extra payment on top of the loan that ostensibly protects the borrower in case of an emergency. The bill would expand the types of loans that companies can add insurance to.” (News & Observer, 8/24/17)

Multiple warnings are listed on the North Carolina Attorney General’s website about lenders who “may imply that credit insurance is necessary for you to get the loan, or they may automatically include the insurance as part of the loan agreement you’re given to sign.” “The North Carolina attorney general’s office lists multiple warnings about credit insurance online, under its “Consumer” webpage. “In North Carolina, lenders cannot require you to buy most types of credit insurance,” one warning says. “But some lenders may imply that credit insurance is necessary for you to get the loan, or they may automatically include the insurance as part of the loan agreement you’re given to sign.” (News & Observer, 8/24/17) House Bill 140 opened the credit insurance market for items like jewelry, off-road vehicles, and other types of personal property. “Currently the market for credit insurance is limited to loans for “personal household property,” like furniture and appliances. But the bill would open the market for this insurance to high-interest loans for all types of personal property, including things like jewelry, off-road vehicles and more. During debate in the House, Rep. Deb Butler said, “The insurance company’s rate of return is about 60 percent, which is grotesque... This type of insurance is a gravy train for insurance companies. It preys on poor people.” “The insurance company’s rate of return is about 60 percent, which is grotesque,” Rep. Deb Butler, a Wilmington Democrat, said during debate in the House. “... This type of insurance is a gravy train for insurance companies. It preys on poor people.” (News & Observer, 8/24/17)

Stephen Ross voted for a bill that eliminated a formal track for homeowners to protest development in their communities

Ø Stephen Ross voted for H201. (H201, concurred, 7/15/15)

The House voted 82-28 in favor of a bill that eliminated a formal track for North Carolina homeowners to protest development in their communities. “A bill eliminating a formal track for North Carolina homeowners to protest development in their communities passed the General Assembly on Wednesday and is headed to the governor, who will likely approve it. The House voted 82-28 in favor of eliminating protest petitions, which residents can sign to increase the standard needed for city councils to approve zoning changes.” (Associated Press, 7/15/17) Under current law, the city council must approve any zoning changes “if 20 percent of community members or 5 percent of owners inside a 100-foot buffer around a proposed development sign the petition.” “Under current law, if 20 percent of community members or 5 percent of owners inside a 100-foot buffer around a proposed development sign the petition, the city council must approve any zoning changes to the property by a three-quarters majority.” (Associated Press, 7/15/17) The petitions have been in place for over 90 years with Democrats and legislators from larger cities like Raleigh and Durham opposed to ending the petitions. “Democrats and legislators from larger cities such as Raleigh and Durham opposed ending the petitions, which have been in place for more than 90 years. Members of both houses failed to pass compromise amendments raising the required number of petitioners and lowering voting threshold for councils, eliciting vocal opposition to the bill before it passed.” (Associated Press, 7/15/17) “Rep. Stephen Ross, R-Alamance, said he saw a developer in his county go bankrupt after being held up for years by a protest petition. The project is now underway, Ross said, but it has taken 11 years to begin construction. "That's what a protest petition can do," Ross said. "This is wrong." “Supporters of the bill accuse protest petitions of being undemocratic and allowing a small number of residents to block development. Concerned residents, they argue, still have access to petition city council members on their own. Rep. Stephen Ross, R-Alamance, said he saw a developer in his

county go bankrupt after being held up for years by a protest petition. The project is now underway, Ross said, but it has taken 11 years to begin construction. "That's what a protest petition can do," Ross said. "This is wrong." (Associated Press, 7/15/17)

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