Payday loan job shadows Stefanowski’s run for governor

Hartford — In his run for Connecticut governor, Republican businessman Bob Stefanowski touts his stints with blue-chip companies like General Electric and UBS Investment Bank. But the role getting all the attention is his most recent job as CEO of a global payday lending company.

Rivals have piled on criticism of Stefanowski’s involvement with a company offering loan products that are not even legal in Connecticut. In the GOP primary, one candidate’s advertisements dubbed him “Payday Bob.”

The 56-year-old gubernatorial candidate says his experience straightening out the troubled, Pennsylvania-based DFC Global Corp. would serve him well fixing the state’s stubborn budget deficits.

“It really bothers me that I’m being attacked on a company that I cleaned up,” Stefanowski said in an interview with The Associated Press. “I brought integrity to it.”

A review of Stefanowski’s tenure leading DFC Global Corp. from 2014 to January 2017 shows he improved its financial performance and took steps to meet regulators’ demands. It also suggests he struggled to bring lasting changes to practices described by critics as preying on the poor and people in financial distress.

Payday loans — unsecured, short-term loans that typically allow lenders to collect repayment from a customer’s checking account regardless of whether or not they have the money — are void and unenforceable in Connecticut, unless they’re made by certain exempt entities such as banks, credit unions and small loan licensees. Local loan companies can charge only up to a 36 percent annual percentage rate. According to the Center for Responsible Lending, 15 states and the District of Columbia have enacted double-digit rate caps on payday loans.

When Stefanowski went to work for the company in November 2014, he left his position as chief financial officer of UBS Investment Bank in London. DFC had recently agreed to refund more than 6,000 customers in the U.K. who received loans for amounts they couldn’t afford to pay back, following a crackdown on payday lending practices by the U.K.’s Financial Conduct Authority amid calls for tougher regulation by anti-poverty advocates.

In the first month of the job, Stefanowski said he fired 20 of DFC’s 30 top employees. About 147,000 additional customers needed loans refunded in 2015 during Stefanowski’s watch. He said that happened after one of his executives discovered unfair collection practices during an internal review he ordered because the company had “done a lot of bad things” before he arrived.