Senate Democrat is about to take the brakes off predatory payday lenders


#1

Originally published at: https://boingboing.net/2017/11/15/s-1642.html


#2

The bill is nominally about allowing for innovation in finance product…

Translation: innovation in financial products = finding ways for the financial service industry to siphon off even more money for the “value” they provide.

Seriously. What other kind of “innovation” would they be interested in? Making less money?


#3

Is this what Dems are doing in their free time these days? WTF?


#4

That’s understating the case. Payday lenders in the UK were charging more than 4,000% before the government started clamping down on them.


#5

About a year ago, my wife and I found ourselves in a dire position - due to series of unexpected and rapidly occurring events, our savings were wiped out and we needed money very quickly or some very necessary things - including a car - would disappear from our lives. We’d been in financial trouble a few years earlier when jobs dried up and moving to take care of family became necessary, and our credit scores just hadn’t bounced back yet, so the bank wasn’t interested in talking to us. We sold everything we could spare, and a few things we couldn’t, but were still short about $2,000.

In desperation we connected with an on-line company who could get us the money we needed in 24 hours. In fact, they pressured us to take even more than we needed because “who knows what could happen?”, but we stuck with the original $2K. Now, let me be very clear - I knew EXACTLY what I was getting in to, I researched it and was well aware of the unbelievable interest rate over this 6 month (not a “payday” loan) installment loan, I knew what the added fees were going to be, and I knew the toll that the payments were going to take on our finances, but I we had no choice.

That $2,000 cost us over well $6,000. What about people who don’t understand what’s happening, who don’t realize what kind of cost this loan is going to have? The loan company certainly didn’t make it easy for me to figure out and while I’m not the sharpest tool in the shed, I’m not a total idiot. These companies serve a need, but there has to be some control, a way to prevent unbridled greed from rolling over those in trouble.

I’m not against profits, and I understand the concept of supply and demand - or need. But this is unconscionable, it is no different that charging $10 for a bottle of water after a hurricane. That a supposed Democrat, the type of person I always thought was “on my side”, would seek to make it EASIER for these companies to operate is appalling to me.And then I realized it - oh yeah, my loan company is based in Virginia, just like this politician. Huh,how about that.


#6

Anyone want to offer a bet about which interest group has been making large campaign contributions to this Senator?


#7

This is one of the problems with accelerationist strategies. In the short term all a wildly horrible opposition provides is cover for the lesser of the evils to see how far they can push things and still be considered the lesser evil…


#8

That’s a bingo.

Top Industries, 2013 - 2018
Industry	            Total	    Individuals	PACs
Securities & Investment	$1,354,513	$1,185,913	$168,600

#9

Especially if that money is being siphoned from poor or desperate people. There’s a whole toxic economic ecosystem devoted to doing this: rent-to own shops, easy-credit used car dealers, tax refund loans, subprime credit cards, etc.

Wasserman-Schultz was another prominent Dem who supported this evil payday load industry. According to Opensecrets, Warner takes a lot of donations from the securities and investment industry, which masks the storefront bottom feeder companies they’re backing.


#10

Democrats do shitty things, too. Glad to see this being reported here.


#11

Pay day lenders are fucking evil. It is legalized loan sharking. Pawn shops have a much more modest interest rate. We should be capping these loans at much, much less. They are fucking thieves.


#12

I’d like to propose some “innovations” in hospice treatment for the politicians backing this proposal.


#13

Where to file complaints about this WTF’ery

My view of people who support the payday loan industry and oppose heavy heavy regulation of it, is that they should be subjected to the most creative medieval type tortures people can think of.


#14

Yup, they got slapped down in Canada several years back, too. I can’t recall what the new max is, but some other fallout included Money Mart losing a massive class-action suit and paying borrowers something on the order of hundreds to thousands of dollars each. Of course, as i understand it, the payouts were half cash and half ‘store credit’ against the interest on future loans. But still.

Curious, i just went to look. One of the requirements is that the words ‘Payday Loans are High Cost Loans’ or ‘Payday Loans are a high-cost form of borrowing’ must appear on paperwork, and be posted in-store, along with the maximum allowable interest rate (which apparently varies by province, and seems to range from about $17 per hundred to $25).

/nerdmode off/
I’ve been tracking the appearance of payday-loans places in cities to find it a fairly reliable indicator of the increasing non-health of such for a while. I’ll shut up now. :smiley:


#15

I live in Virginia. While I like Warner on most other issues, when it comes to the financial industry, he’s got blinders on. Car Title and Payday Lenders are BIG BUSINESS - especially in immigrant and poor areas and in areas around military bases. Young soldiers, poor folks without access to regular banks and people who can’t speak English are specifically targeted. It’s disgusting.


#16

Disgusting indeed as Warner’s actions spit in the face of state and local initiatives:

I know a few Va State Senators and reps who are scratching their heads right now.


#17

meanwhile…

The real reason so many companies are sick, as Bloomberg explained in a recent feature, has to do with debt. Private equity firms purchased numerous chain retailers over the past decade, loading them up with unsustainable debt payments as part of a disastrous business strategy. Billions of dollars of this debt comes due in the next few years. “If today is considered a retail apocalypse,” Bloomberg reported, “then what’s coming next could truly be scary.” Eight million American retail workers could see their careers evaporate, not due to technological disruption but a predatory financial scheme. The masters of the universe who devised it, meanwhile, will likely walk away enriched, and policymakers must reckon with how they enabled the carnage.


#18

Yup

Save your money kids. (Regardless)


#19

Have you not read the financial industry’s excellent public relations literature? If you regulate them, then
no money will be available for loans and the entire system will collapse.


#20

The bulk of this guy’s constituents must have no clue this guy is selling them down the river. Hopefully this makes airwaves all over Virginia. The only Democratic ideal I see here is perhaps pushing class differences to a head and fomenting change…but he doesn’t strike me as a forward thinking revolutionary type.