TX Repugs protecting wealth extraction from poor: Payday lending bill's prospects ...

[boutons_deux]

Payday lending bill's prospects dwindling
the payday lending/auto title regulation bill is showing signs of poor health.


Rep. Mike Villarreal (http://www.mysanantonio.com/?controllerName=search&action=search&channel=news%2Fpolitics%2Ftexas_legislature&search=1&inlineLink=1&query=%22Mike+Villarreal%22), D-San Antonio, the House sponsor, tweeted over the weekend that he was looking beyond the current legislative session: “Planning interim. Will travel state to advance payday auto title ordinances one city at a time with Coalition for Fair Lending (http://www.mysanantonio.com/?controllerName=search&action=search&channel=news%2Fpolitics%2Ftexas_legislature&search=1&inlineLink=1&query=%22Coalition+for+Fair+Lending%22).”

On Monday, this Villarreal Facebook post conveyed more frustration: “After months of work on payday and auto title lending reform, it's hard to accept that we may not have the votes to move forward with meaningful protections for consumers. Texas has a long history of free markets, but we also have a long history of protecting consumers from usury. Our state's current approach to payday and auto title lending is a break from that honorable tradition. Our most vulnerable citizens pay the price. I'm still working to find a path forward.”

Then Tuesday, Villarreal issued a release with the bill's Senate sponsor, Sen. John Carona (http://www.mysanantonio.com/?controllerName=search&action=search&channel=news%2Fpolitics%2Ftexas_legislature&search=1&inlineLink=1&query=%22John+Carona%22), R-Dallas, calling a news conference to “join with consumer advocates in urging the Legislature to pass meaningful payday and auto title lending reform legislation this session.”


http://www.mysanantonio.com/default/article/Payday-lending-bill-s-prospects-dwindling-4497125.php

Repugs find plenty of time to work on tax cuts and tax expenditures for corporations and wealthy, but just can't squeeze in protection of the poor against predatory, usurious lenders.

[boutons_deux]

Congressmen Go To Bat For Abusive Payday Lending Industry, Attack Justice Department Investigation (http://thinkprogress.org/economy/2014/01/27/3209121/issa-payday-lenders/)

The payday lending industry is infamous for providing 12 million Americans each year (http://thinkprogress.org/economy/2013/11/01/2873481/payday-lending-report/) withshort-term loans (http://www.consumer.ftc.gov/articles/0097-payday-loans) that end up costing an average of more than 138 percent in interest and fees. But as the U.S. Department of Justices moves to crack down (http://www.reuters.com/article/2014/01/27/us-usbanks-doj-payday-idUSBREA0Q09S20140127) on those lenders who have illegally taken billions from the checking accounts of consumers, two powerful U.S. Congressmen are going to bat for the industry, a letter obtained by ThinkProgress (http://thinkprogress.org/wp-content/uploads/2014/01/issaletter.pdf) reveals.

Each year, millions incur long-term debt by taking out a short-term loan (http://thinkprogress.org/economy/2012/01/19/407365/report-how-payday-lenders-make-billions-by-fleecing-americans-in-poverty/) that’s intended to cover borrowers’ expenses until they receive their next paychecks. Most take out nine repeat loans per year with an interest rate as high as 400 percent (http://www.responsiblelending.org/payday-lending/tools-resources/fast-facts.html).

Forty-four percent of borrowers ultimately default, even after paying back their loans several times over, and thus are pushed ever closer to poverty.

Critics have called the practice “legalized loan sharking (http://www.huffingtonpost.com/2010/09/14/payday-lenders-banks_n_716246.html)” and describe the industry as “bottom feeders.” In recent years, major banks have also joined in the practice (http://thinkprogress.org/economy/2014/01/21/3186891/banks-end-payday-lending-deposits/).

In recent weeks, the U.S. Department of Justice began to take aim (http://www.cnbc.com/id/101365366) at the big banks that illegally help payday lenders rip off consumers. “Operation Choke Point (http://www.cnbc.com/id/101365366)” is a massive investigation into whether banks help payday lenders illegally siphon billions of dollars from consumers’ checking accounts in exchange for a fee. Some banks, which offered loans of their own, recently announced they would get out of the payday lending business entirely toavoid a separate regulatory crackdown (http://thinkprogress.org/economy/2014/01/21/3186891/banks-end-payday-lending-deposits/).

But rather than cheer this consumer-friendly move, two powerful Congressmen are moving to stop it. House Oversight Committee Chairman Darrell Issa (R-CA) and Subcommittee on Economic Growth, Job Creation and Regulatory Affairs Chairman Jim Jordan (R-OH) sent a letter (http://thinkprogress.org/wp-content/uploads/2014/01/issaletter.pdf) to Attorney General Eric Holder on January 8, accusing the Justice Department of “using its civil investigative power” to “inappropriately target two lawful financial services: third-party payment processing and online lending.”

They wrote:

The Department has consistently stated that its goal is to combat mass-market consumer fraud. However there is ample evidence that the true target of Operation Choke Point is the online lending industry, not actual frauders. Initial press reports of the Department’s investigations support such an understanding.


As their “strongest evidence,” Issa and Jordan cite a press release by one bank that cited inquires that were “part of an industry-wide DOJ investigation” of electronic financial transaction services “provided to payday lenders.” They demand any documents and communications, dating back to 2011, relating to the operation.

Since he became chairman of the House Oversight Committee after the 2010 elections, Issa has consistently used the committee to defend the interests of corporations.

http://thinkprogress.org/economy/2014/01/27/3209121/issa-payday-lenders/

0.1%er Issa just doing what ALL Repugs do ALL THE TIME: protect/enrich corporations as they fleece Americans with shitty products and high prices.

[Wild Cobra]

We had this debate here in Oregon a few years back. These are high risk loans, and that's why they charge so much. These businesses need to stay profitable. Are the net profits excessive? I don't know. However, clamping down on them may mean that the only lenders who may give money to someone needing money, may no longer be around to do so. The people who place themselves in these citations of a repeat cycle are so irresponsible, they would just lose their money some other way in my opinion.

[Winehole23]

you'd root for Goliath based on the the popular sentiment against him, WC

[boutons_deux]

Payday Loan Companies Make Their Money By Trapping Customers In Debt (http://thinkprogress.org/economy/2014/03/25/3418809/cfpb-payday-loans-report/)

More than 80 percent of all payday loans are taken out as part of an expensive, dead-end cycle (http://blogs.marketwatch.com/capitolreport/2014/03/25/over-80-of-payday-loans-are-rolled-over-or-followed-with-new-loan-cfpb-study-finds/) of borrowing, according to a new report from the Consumer Financial Protection Bureau (CFPB).

The report (http://files.consumerfinance.gov/f/201403_cfpb_report_payday-lending.pdf) separates new borrowing from repeated payday loans, and finds that roughly 45 percent of new loans end up getting renewed multiple times before they are paid off. One in seven gets renewed 10 or more times.

The industry relies on these repeat borrowers for the vast majority of its business. More than four in five loans was part of one of these misery cycles in which a borrower is unable to get out of debt. Given that each new loan incurs a 15 percent fee, the volume of lending to these repeat borrowers is accounting for the vast majority of lender income.

The industry “depends on people becoming stuck in these loans for the long term,” CFPB head Richard Cordray said Tuesday in Nashville. Lenders hoping to avoid regulation will point to the report’s finding that a little more than half of all newly originated payday loans do not end up in the hopeless repeat borrowing cycles that have drawn criticism and regulators to the industry. But the report shows the industry makes its money “from people who are basically paying high-cost rent on the amount of their original loan,” Cordray said.

The report is an unprecedented snapshot of what the marketplace for high-fee, high-interest short-term loans really looks like. The agency looked at anonymized data from payday lending companies — the sort of market data collection that CFPB opponents have likened to gestapo surveillance in Nazi Germany (http://thinkprogress.org/economy/2014/02/12/3282591/webster-cfpb-gestapo-nazis/) — that makes it possible to separate newly initiated payday loans from patterns of repeat borrowing that the report calls “loan sequences.” Differentiating between customers who take out and quickly repay one loan from those who end up chronically indebted to the same lenders allows the agency to see consumer and lender behavior much more clearly. That information will play a significant role in shaping the ongoing policy debate over how payday lenders should be regulated at both the state and national level.

Rather than fretting over every single payday loan, Cordray said Tuesday (http://www.consumerfinance.gov/newsroom/director-richard-cordray-remarks-at-the-payday-field-hearing/), the agency is focused on cases where “the subsequent loans are prompted by a single need for money — that is, the follow-on loans are taken out to pay off the same initial debt for the consumer.” Customers who quickly repay the loan that let them keep their car in good repair or pay an unexpected hospital bill are probably getting a good deal. When a person instead gets stuck rolling that debt over without ever paying it down, “that is where the consumer ends up being hurt rather than helped by this extremely high-cost loan product,” Cordray said.

This quantitative confirmation of the predatory nature of payday lending could add momentum to the ongoing push for stricter oversight of the industry. The report shows both that there is indeed a sincere demand for this kind of short-term loan product and also that the companies currently satisfying that demand get their money from trapping a sizable number of their customers in perpetual debt. Those facts strengthen the hand of those who want to empower the post office (http://thinkprogress.org/economy/2014/02/03/3239261/elizabeth-warren-post-office-financial-services/) to offer these same sorts of loans without charging usury rates. It should also discourage legislators in Pennsylvania from inviting payday lenders back into their state (http://thinkprogress.org/economy/2014/03/01/3349161/pennsylvania-lawmaker-invites-payday-lenders-state/), and embolden supporters of a crackdown on payday lending in a variety (http://thinkprogress.org/economy/2014/03/07/3378631/louisiana-payday-loans/) ofother states (http://thinkprogress.org/economy/2014/02/10/3270991/payday-lenders-dakota-idaho-alabama/).

http://thinkprogress.org/economy/2014/03/25/3418809/cfpb-payday-loans-report/

[boutons_deux]

google "payday lenders owned by banks" to see how payday lenders are backed by or actually ARE mainstream banks.

[boutons_deux]

"Payday Lending in America: Who Borrows, Where They
Borrow, and Why"




INTERACTIVE MAP:

State Payday Loan Regulation and Usage Rates

From the report:




Payday loan borrowers spend approximately $7.4 billion annually

20,000 storefronts and hundreds of websites

5.5 percent of ALL adults nationwide used a payday loan in the
past five years

75% of borrowers went to storefront lenders and nearly one-
quarter went online.

State regulatory data show that borrowers take out eight payday
loans a year.

55%, of payday loan borrowers are white, and 52% are female

Borrowers are employed, white, female, and 25 to 44 years old

69% use these loans to pay for a recurring expense, like rent, a
mortgage, utilities, credit card payments or food


http://www.paydaybusinessownersassociation.com/industry.html

[MultiTroll]

Congressmen Go To Bat For Abusive Payday Lending Industry, Attack Justice Department Investigation (http://thinkprogress.org/economy/2014/01/27/3209121/issa-payday-lenders/)

But rather than cheer this consumer-friendly move, two powerful Congressmen are moving to stop it. House Oversight Committee Chairman Darrell Issa (R-CA) and Subcommittee on Economic Growth, Job Creation and Regulatory Affairs Chairman Jim Jordan (R-OH) sent a letter (http://thinkprogress.org/wp-content/uploads/2014/01/issaletter.pdf) to Attorney General Eric Holder on January 8, accusing the Justice Department of “using its civil investigative power” to “inappropriately target two lawful financial services: third-party payment processing and online lending.”

Since he became chairman of the House Oversight Committee after the 2010 elections, Issa has consistently used the committee to defend the interests of corporations.

Bitch Issa today:
America's poor are 'envy of the world,' says richest Congressmanhttp://money.cnn.com/2015/05/07/news/economy/issa-poor/index.html

[boutons_deux]

Bitch Issa today:
America's poor are 'envy of the world,' says richest Congressman

http://money.cnn.com/2015/05/07/news/economy/issa-poor/index.html

0.01% Issa is worth $450M, ranked as the richest Conrgessasshole. He is an incredibly dumb, incompetent as politician, evidence that having lots of money doesn't correlate with any other personal values, qualities.