- Associated Press - Wednesday, May 27, 2015

TRENTON, N.J. (AP) - The state committee that oversees New Jersey’s nearly $80 billion public pension fund is considering divesting in a firm that owns a payday lending firm.

Payday loans typically make debtors short-term, high-rate offers and are illegal in New Jersey.

State Investment Council Chairman Brendan Thomas “Tom” Byrne Jr. asked the Treasury Department’s Division of Investment on Wednesday during a public hearing to explore options to divest from JLL Partners. The state invested $50 million with the firm in 2005, and in 2006 JLL Partners bought ACE Cash Express Inc. That company provides short-term loans and other services.

The fund has a pending $150 million investment with JLL Partners.

New Jersey Citizen Action and the New Jersey State Conference for the NAACP asked the council to immediately pull the fund’s money from JLL Partners. The groups argued payday lenders disproportionately affect minority communities and perpetuate harmful cycles of debt.

“It is unethical and frankly unfathomable that the state could ever consider using pension fund money to export payday lending,” said Phyllis Salowe-Kaye, New Jersey Citizen Action executive director.

JLL Partners spokesman Bill Miles declined to comment on the council’s proposal.

Council members say the state follows guidelines and performs due diligence before selecting investments and that the council oversees the fund’s assets on behalf of public-sector pensioners and has a responsibility to pursue a return on investments. The council did not have a direct role in selecting JLL Partners’ purchase of ACE Cash Express.

“We did not expressly approve this sort of investment,” Byrne said, but added that the panel was “deeply concerned” when the investment was brought to members’ attention.


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