Title Lender with Shady Past Drops $1.7 Million on Pro-Industry South Dakota Ballot Measure

February 3, 2016

Select Management Resources Contributed $1.7 Million to A South Dakota Group That Is Pursuing a Ballot Measure to Insert a Loophole Allowing Unlimited Interest Rates into The State Constitution.

“A Georgia company that provides short-term loans has contributed about $1.7 million to a South Dakota group pursuing a ballot measure that opponents say is an industry-backed attempt to insert a loophole allowing unlimited interest rates into the state constitution. The company, Select Management Resources LLC, was the sole financier in 2015 of South Dakotans for Fair Lending, a political committee pushing for the amendment to cap interest rates in South Dakota at 18 percent annually but allow higher ones if the borrower agrees to them. Campaign finance documents released this week show the financial connection between the amendment campaign and the short-term lending industry. The amendment group spent more than $1.5 million circulating petitions to get the measure on the November 2016 ballot.” [Associated Press: “Short Term Lender Gives $1.7 Million For Interest Rate Amendment,” 2/2/16]

Rod Aycox Runs Select Management Resources.

“Hildebrand has said Rod Aycox, who runs Select Management Resources, made a surprise visit to his Sioux Falls coffeehouse in June to try to persuade him not to pursue the 36 percent measure. Hildebrand also said Aycox paid people to try to sabotage his restaurant. Aycox didn’t immediately return a telephone message from The Associated Press on Tuesday requesting comment.” [Associated Press: “Short Term Lender Gives $1.7 Million For Interest Rate Amendment,” 2/2/16]

Who is Rod Aycox? Well, According to His PreydayLenders.org Profile from National People’s Action:

Aycox Was a Failed Insurance Man and Used Car Salesman Before Opening Title-lending Store

• Aycox Was a Failed Insurance Man and A Former Used-Car Salesman Before He Began His Title-Loan Business. “In 1991, Roderick Aycox, a former Riverdale used-car salesman and failed insurance man, sold his auto business, maxed out his credit cards, and opened a string of title pawnshops in Georgia. It proved to be a lucrative investment. In 1992, Georgia legislators passed a law allowing pawnbrokers to make loans at an annual percentage rate of up to 300 percent in interest and pawnshop fees.” [Atlanta Journal Constitution, 2/22/98]

• Aycox Said He Got into The Title-Loan Business Because He Failed in The Insurance Business. “He said he got into the title pawn business because he had failed in the insurance business.” [Atlanta Journal Constitution, 2/22/98]

• Aycox Was a College Dropout and Used Car Salesman When He Started His First Title-Loan Company. “In 1990, Aycox was a college dropout and a used car salesman with uncertain prospects. One day he got a flier hawking software to manage a new business called title pawn. He didn’t buy the software, but he bought into the concept. Stretching his credit cards to their limits, he rented a storefront on Tara Boulevard, put up a banner and waited for borrowers to find him. They did. The first day, he made four loans.” [Atlanta Journal Constitution, 1/31/05]

Aycox Was Business Partners with a Man with Alleged Mafia Ties and Another Who Was Indicted for Drug Smuggling

• In 1993, Aycox Joined a Pair of Investors to Create Title Loans of America Which Became America’s Largest Title Lender. “Aycox worked solo behind the counter for two years, logging 100-hour workweeks. After the General Assembly approved title lending, Aycox expanded in Atlanta and to Birmingham. To take title lending national, though, Aycox needed partners. He joined with a pair of investors in 1993 to form a company called Title Loans of America. The Atlanta-based firm soon became America’s largest title lender. Aycox says his partners put up the money and he provided the expertise to open about 200 stores in 15 states. Expanding into some states meant little more than filling a regulatory vacuum; those states’ laws neither specifically allowed nor barred title lending. Opening in other states, however, required mastering local politics.” [Atlanta Journal Constitution, 1/31/05]

• Aycox Was Business Partners with Alvin Malnik Who Had Been Allegedly Linked for Three Decades “By Law Enforcement, Newspapers, And Authors to Organized Crime.” “Aycox also revealed in a deposition the company’s three shareholders: Aycox owned 33 percent of the company; Kenneth Lee Partiss owned 17 percent; and U.S. Title Trust 50 percent. S. Title Trust? Its beneficiary is a 65-year-old south Florida millionaire lawyer and real estate mogul named Alvin I. Malnik. For the better part of three decades, Malnik constantly has been linked by law enforcement, newspapers and authors to organized crime, particularly to legendary mob financier Meyer Lansky.    Although Malnik has never been convicted of a crime, gaming regulators in Nevada and New Jersey won’t let casino operators have anything to do with him because of his suspected Mafia links.   “The evidence establishes that Mr. Malnik associated with persons engaged in organized criminal activities, and that he himself participated in transactions that were clearly illegitimate and illegal. . . . Federal authorities have long believed Mr. Malnik to be involved in organized crime,” the New Jersey Casino Control Commission concluded in 1980 in an assessment of Malnik that was reiterated in 1993 by New Jersey’s Division of Gaming Enforcement.   Malnik did not return phone calls from the Times, but in the past he has repeatedly denied any involvement in organized crime. In a 1982 interview with the Miami Herald, Malnik – described once in Reader’s Digest as Lansky’s “heir apparent” – said in fact he had only once met Lansky. [St. Petersburg Times, 1/24/99]

• Aycox Was Also Business Partners with Kenneth Lee Partiss Who Had Been Indicted, And Later Acquitted, Of Drug Smuggling Charges. “Malnik is not the only backer of Title Loans of America known to law enforcement. Partiss, the 17-percent owner who has addresses in Miami and Atlanta, was indicted – and later acquitted – on drug smuggling charges in Miami in 1983. [St. Petersburg Times, 1/24/99]

• Aycox Left Title Loans of America in 1998 And Created LoanMax Though He Said the Alleged Mob Connections Were Not Why He and Malnik Were No Longer Partners. “LoanMax hails from Atlanta and is headed by Roderick Aycox, who founded Title Loans of America with Malnik. The two split in 1998, the same time TLA was being hounded by journalists in other states because of Malnik’s reputation. Aycox told the Business Review he didn’t leave Malnik because of the publicity. He would only say, “I decided I didn’t want to partner with anyone, and I certainly didn’t want to partner with Malnik.” Although he said there was no falling out, he said he hasn’t spoken to Malnik since the split, and that Malnik has no financial relationship with his new companies whatsoever. Aycox is the direct owner of LoanMax as well as numerous affiliates with names such as North American Title Loans and Northwest Title Loans. He also owns Select Management Resources, which manages the companies. All told, he has some 200 stores in 17 states.” [New Hampshire Business Review, 2/22/02]

• 1998: Aycox Sold His Interest in Title Loans of America and Started Select Management Resources Which Operates Under the Names Atlanta Title Loans, LoanMax, And North American Title Loans. “Later that year, Aycox sold his interest in Title Loans of America. He started his own company, Select Management Resources, based near his home in Alpharetta, and opened stores under the names Atlanta Title Loans, LoanMax and North American Title Loans.” [Atlanta Journal Constitution, 1/31/05]

Aycox Settled Wrongful Death Suit after a Repo Man Hired by His Company Shot and Killed a Borrower While Trying to Seize His Car

• 1997: Aycox and His Company Settled a Wrongful Death Suit After a Repo Man Hired by The Company Shot and Killed a Borrower While Trying to Seize His Vehicle. “In 1997, Aycox and his company were hit with a wrongful death lawsuit in Georgia after a repo man hired by the company shot and killed someone while trying to seize their vehicle. That case was settled under confidential terms, but court records in the suit provided a window into the privately held company.” [St. Petersburg Times, 1/24/99]

Aycox’s Companies Charged APR’s Greater than 400% and He Opposed Rate Caps

• Aycox’s LoanMax Store Posted a Maximum 500% APR but Aycox Said “We Never Go That High.” “The manager at the branch told this reporter – posing as a prospective applicant – that the rate was 35 percent. Only after being asked did the manager offer the information that the rate was a monthly one – and translates into a 420 percent annual rate. The annual APR is listed as 500 percent on a yellow sign on the counter, there were no written materials, and a contract is provided only when a person sits down to take out a loan. Aycox later said the loan rate was 30 percent a month. The 500 percent rate was just the maximum, “but we never go that high,” he said. Aycox promised to fax a LoanMax contract, but none was provided by deadline. Disclosure materials are not in the public file at the state Banking Department. State and federal regulations only require written disclosure on the contracts to a borrower.” [New Hampshire Business Review, 2/22/02]

• Aycox: 36% Rate Cap Would “Force Our Company Out of the Business” And Those Who Oppose Title Loans “Do Not Grasp the Basic Economics of Our Industry.” Aycox, in a statement through his firm, says artificially capping interest rates at even a higher 36% would “force our company out of the business and thereby eliminate a needed credit option for hundreds of thousands of consumers.” “Unfortunately, special interest groups who oppose the idea of title loans being made available to consumers do not grasp the basic economics of our industry,” the Aycox statement said. [USA Today, 12/27/06]

Aycox and His Companies Have Been Sued for Their High Interest Rates

• Aycox and His Companies Were Defendants in A Federal Class Action Lawsuit That Accused Them of “Victimizing Customers by Collecting Illegal Debts at Interest Rates That Violate Both Georgia’s Criminal Usury Statute and Federal Truth-In-Lending Laws.” “Aycox and his companies are now defendants in a federal class action suit that accuses pawnbrokers of victimizing customers by collecting illegal debts at interest rates that violate both Georgia’s criminal usury statute and federal truth-in-lending laws.” [Atlanta Journal Constitution, 2/22/98]

• Loan Max Was Sued by The DC Attorney General for Charging Interest Rates of More Than 300% And Settled Out of Court by Refunding Customers and Returning Repossessed Cars. Select Management is one of several companies owned by Rod Aycox. Another Aycox-owned title lender, Loan Max, was sued in 2009 by District of Columbia Attorney General Peter Nickles for charging interest rates of more than 300 percent a year, according to a press release from the attorney general’s office. Loan Max settled out of court by agreeing to provide refunds to customers who lived in the nation’s capital and return cars that the company had repossessed, according to a D.C. government release. [Bloomberg, 3/21/12]

No One Has Done More for the Title-lending Industry than Aycox

• The Aggressive Lobbying by Title Loans of America President Rod Aycox “Helped Open the Doors for Countless Other Title Loan Operators Across the Country.” “In California, the title loan bill didn’t even make it out of committee.+++Until a civil lawsuit in Georgia surfaced in 1997, little was known about Title Loans of America except that it was leading a fast-expanding, controversial industry. The aggressive lobbying by its president, former used car salesman Roderick Aycox of Atlanta helped open the doors for countless other title loan operators across the country. Neither Aycox nor his attorney returned phone calls for this article. An official at the company’s Atlanta office said Aycox is no longer with the company, though he remains listed as a top officer on corporate documents.” [St. Petersburg Times, 1/24/99]

• AJC: “No One Has Done More to Spread Title Lending Across the Country” Than Aycox and He Is the Industry’s “Most Impassioned Evangelist”; Aycox: “I Love the Business…My Business Is Very Fair, Upfront and Decent.” “Aycox was 24 years old when he opened his first title lending store on Tara. He wasn’t quite the first title lender. He still isn’t quite the biggest. But no one has done more to spread title lending across the country from its Georgia roots. Now a 38-year-old suburbanite on a low-carb diet, juggling a demanding job, a wife, two children and a house in Alpharetta, Aycox has become his industry’s most impassioned evangelist. “I love the business,” he says. “I enjoy the business. I believe in the business. . . . My business is very fair, upfront and decent.” [Atlanta Journal Constitution, 1/31/05]