When Phyllis Salowe-Kaye learned that the New Jersey State Investment Council (NJSIC) had invested 50 million state pension dollars with a private equity firm that used some of the funds to purchase a predatory payday lender, she went through the proverbial roof. The longtime executive director of New Jersey Citizen Action (NJCA) quickly assembled a powerful coalition of consumer protection and civil rights advocates and began applying pressure on the commission to sell its stake in the firm. Payday lending is illegal in New Jersey and she considered the use of state dollars to purchase a payday lender, at the very least, a breach of ethics and conflict of interest for the commission.
On January 27, 2016, almost 10 months after the NJCA’s initial inquiry, the state investment commission announced at its monthly meeting that it had finalized divestiture from JLL Partners, the private equity firm that purchased Ace Cash Express. Ace had earlier been fined $5 million and ordered to repay borrowers another $5 million by the Consumer Financial Protection Bureau (CFPB), which found Ace’s lending and collection practices to be predatory.