Consumer Financial Protection Bureau is supposed to “protect”
consumers from fraud and predatory lending. But since 45 has ruled
the roost, he has empowered exploiters to extract too much money from
consumers. And he has exposed himself to implicit bribes, which is
why the Consumer Financial Services Association of America was
meeting at the Trump National Doral Golf Club from Tuesday April 17
to Thursday April 19, 2018. The payday lenders, who describe
themselves as the “small dollar credit industry, offer loans at
an annualized interest rate of as high as 600 percent, have been
lobbying to loosen regulations against their industry. As they met
in Florida, they focused on the fact that the Florida state
legislature had planned to allow them to lend more, at higher
interest rates, in the interest of exploiting more poor people,
mostly Black and Brown folks.
went to Orlando and Miami as the guest of the National Faith and
Credit Roundtable; a group of religious leaders who are disturbed
about the many ways payday lenders are able to exploit poor people.
The stories they tell are harrowing – about a woman who
borrowed $500 to fix her car so that she could go to medical
appointments, and then found herself paying more than $6000 –
12 times the amount she borrowed—over 2 years, and still
needing intervention to stop her enormous payment. I went to hear
ministers use the Bible to talk about the many ways that usury is
seen as an abject sin. I went to Orlando and Miami because I wanted
to bear witness to the work “woke” pastors are doing to
forward the agenda of social and economic justice.
this were only about Florida, it might not merit my attention. But
Florida is Missouri, is New Mexico, is Nevada, is California, is
Wisconsin, is Michigan. Each of these states have very loose
regulations for payday lenders, which means that folks are charging
as much as 600 percent for these “small dollar” loans.
The challenge is that desperate people go “small dollar’
but offer their car, their next paycheck, or even their home, as
collateral. If the payday lender can go into your bank account to
pay, all your other bills stand in the back of the line. How to
close the gap? Take out another payday loan, and another, and
another. Your small $500 loan grows exponentially. And nobody is
looking out for you.
the Consumer Financial Protection Bureau offered a rule to curb in
payday lenders. And now, with the 45-inspired leadership, CBFB is
considering rescinding the consumer-protective rule. This isn’t
the only way that CPFB has been curtailed from protecting consumers.
In 2013, CPFB issued guidance about the legal risks of dealer markups
and the ways that discrimination pushed Black and Hispanic folks into
higher interest rate loans than their white counterparts. Toyota,
Honda, Ally Financial and others were sued because borrowers of color
paid much higher interest rates than their white counterparts.
there is a move to repeal the 2013 rule, just like the move to repeal
the predatory lending rule. It will take the Senate to repeal the
consumer protecting rules, but the sentiment is not to protect
consumers. In state after state, there is a sentiment to make it
easier for payday lenders to exploit. And in state after state,
there are those who would make it easier for the CPFB to relax rules
against discrimination in lending.
payday lenders are tricksters. They call themselves the “Consumer
Financial Services Association”, wording amazingly close to the
Consumer Financial Protection Bureau. They push themselves out as an
industry association that manages “best practices” in
“small dollar lending”. They engage in the most
pernicious form of lobbying, even purchasing the support of “civil
rights leaders’ who argue that people have “the right’
to enter into financial enslavement. And their high-rolling golf
games at a Trump resort is a wink and a nod to the many ways this
administration is ripping off poor people.
new leadership of the Consumer Financial Protection Agency has been
pressured to relax payday-lending rules. Several states have bowed
to the pressure to support the payday lender that exploit low-income,
mostly Black and Brown, communities. In Florida and Michigan, and in
other states, there are harrowing stories of people being exploited
because payday lenders have a legislative pass. This flies in the
face of the notion that the poor should be protected from extreme
usury, but it is perfectly consistent with the focus of this corrupt
who will take care of consumers who face discriminatory interest
rates, predatory lending and more? Perhaps voters will throng to the
polls in November to elect a Congress dedicated to providing
protection for consumers!