December 2, 2005 -- WASHINGTON — The Rev. Al Sharpton is the new pitchman for a quick-cash lending company with interest rates so outrageous that New York — and about half of all other states — won't allow such firms to do business.
Sharpton is plugging Georgia-based LoanMax, which gives cash to customers who put up their cars as collateral — with monthly interest rates as high as 30 percent, which can balloon to 360 percent annually.
New York drives off aggressive lenders like LoanMax through strict interest caps. Under New York banking law, lenders can set a maximum annual interest rate of 16 percent.
The Empire State rate was established in 1980. It was actually lower before that.
Consumer advocates say that in states without the caps, car-title lenders like LoanMax, which operates more than 100 stores in the South and West, specialize in predatory loans that target poor people with bad credit.
"I disagree," Sharpton told The Post. "Predators are people that prey on people who have no capacity to pay and have no capacity to live up their side of a financial deal.
"If I have the wherewithal, and I decide I want to put up my property and engage in a loan, how is someone a predator of mine?"
Still, Sharpton, the self-anointed warrior for the little man, isn't willing to go down with the LoanMax ship amid outcry from consumers.
He's meeting today with a consumer-advocacy group and company officials.
"Ultimately, Rev. Sharpton will decide whether he will continue doing work with them or not," said his spokeswoman Rachel Noerdlinger.
Jean Ann Fox of the Consumer Federation of America, a watchdog group calling for tighter interest restrictions, said car-title lenders "trap borrowers in perpetual debt through unaffordable balloon payments, high interest costs, and the threat of repossession."
LoanMax gives cash to anyone — no matter their credit — as long as they fork over their title and an extra set of keys. They can repossess and auction off the car if the loan isn't repaid on time.
Its owner, Rod Aycox, has defended the practice as fair, and says LoanMax imposes a higher interest rate because it takes a risk in lending to folks with poor credit when standard banks won't.
Sharpton refused to say how much he's being paid to boost LoanMax in TV commercials airing in Iowa, Virginia and New Mexico.
"It's a talent fee, like 'Saturday Night Live,' " he said. He has been a guest host of the show.
In addition to New York, numerous states, including New Jersey, Connecticut and Massachusetts, have restrictions that chase away car-title lenders.
ian.bishop@nypost.com
