W. Allan Jones, who started Check Into Cash, in Cleveland, Tenn., in 1993, has been a longtime friend and supporter of Mr. Corker’s. The company says it is now the country’s third-largest payday-lending chain, with 1,100 stores in 30 states. Payday loans are short-term, high-interest loans — typically 400 percent on an annualized basis — to help borrowers cover expenses until their next paycheck. Many take out more loans, digging themselves deeper into debt.
Mr. Jones, his relatives and his employees have given money to Mr. Dodd, Mr. Shelby and other members of the Banking Committee, but have been particularly active donors to Mr. Corker, records show. They have contributed at least $31,000 to his campaigns since 2001, when he was running for mayor of Chattanooga.
But payday industry leaders such as Cleveland, Tenn., businessman W. Allan Jones said the proposed cap on interest rates would destroy an industry that helps millions of Americans get short-term loans during financial emergencies and "hasn't taken a penny in any government bailout money.
"Our critics are attempting to capitalize of fears and misinformation generated from the recent credit crisis to further their agendas of total federal control," Mr. Jones said. "Small microloans of $200 didn't cause the nation's financial crisis, yet the industry is criticized by those who did the damage."