Perhaps this topic is a bit niche, I find it incredibly important during these hard economic times and Congress is doing nothing to try and regulate these bloodsuckers. Now I know why (like I really had to think that hard about it)...
The Center for Responsibility and Ethics in Washington (CREW) has released a report on the payday loan industry.
Lobbying expenditures from the payday loan industry more than doubled from $2,045,000 in the 109th Congress to $4,182,550 in the 110th Congress, according to a new report from Citizens for Responsibility and Ethics in Washington (CREW).
http://tpmmuckraker.talkingpointsmemo.com/...
And where do they get all these millions of dollars to throw at our public officials? Out of the bank accounts of the poorest, most cash strapped elements of our society.
If you aren't aware of the way payday loans work, they charge insanely high interest rates (usury) for supposedly short term loans to people with no credit or bad credit. They prey on the lower strata of our society as people are desparate for money but are not able to get it from the higher forms of bloodsucker (ie, the banksters). And being desparate for money could be due to your car being in the shop, or having to buy prescription drugs with no insurance to help with the cost, or any sort of emergency that wasn't planned for and you don't have cash laying around to pay for.
And if you can't repay the loan in time, they offer you a "rollover" of your loan...they take their interest payment (usually around $20 for every $100 loaned) directly out of your bank account on the day your paycheck hits the bank. It becomes impossible to repay as the rollovers mount up and before a poor person knows it, there is no more money to pay for the basics (rent, food, car payment, etc). Most of the time, people try to pay off the first loan by getting a second loan...only compounding an already bad problem. This goes on until the person in question has to default...at which point the phone calls start, the bank account is emptied (either by an ACH withdrawal or a made up check that is submitted to the bank), and the threats begin. If most of these people would just consult the laws in their state, they'd see that there is a way out...difficult to do, to take the abuse, but there is a way. Not that state regulators go out of their way to educate the public...
http://www.debtconsolidationcare.com/...
They are slowly draining bank accounts coast to coast (a few states have outlawed them but not many). Often times they do business illegally but since they've moved to the online community very little is done to shut them down. Example: California has several payday loan regulations...companies have to be registered to do business in CA, the interest rate is capped, they can't loan more than $255, and they can't offer rollovers. All of these regulations are routinely ignored by companies out of state. The Department of Corporations oversees the payday loan business in California but when I called them once to ask them what they are doing to crack down on the lawbreakers, I was told that anyone seeking to relieve themselves of an illegal payday loan should hire a lawyer. Please...they can't afford food...hire a lawyer??
Payday Loan sharks are doing banner business right now...there are so many desparate people out there to take advantage of. So they shower Congress Critters with cash to do nothing and it isn't just the Rethugs (emphasis mine)...
Former Rep. Kendrick Meek (D-FL) was the largest recipient of payday loan campaign cash, receiving $53,900 from the payday industry in the 2010 election cycle, according to CREW. The group said the next largest recipient of donations from the payday lending industry was Rep. Carolyn Maloney (D-NY), who is the ranking member and former chair of the House Subcommittee on Financial Institutions. Maloney received $48,400 in donations from the industry during the 2010 election cycle, said CREW.
This sort of out in the open buying of people we elect to look out for our best interests infuriates me...and it also depresses me. Carolyn Maloney was a congresswoman I respected until I read the TPM article. I think I'll send her a letter asking her to explain herself. I think it's cowardly for our elected officials to be bought off so easily.
Overall, CREW said the industry's spending on lobbying "has skyrocketed, jumping 120% from the 110th Congress to the 111th Congress."
"Once again, we see that money talks in Washington," CREW Executive Director Melanie Sloan said in a statement. "As usual, money paid to lobbyists was well spent, but working Americans were left out in the cold."
During the period in question the industry was able to kill legislative proposals which would have capped payday loan interest rates and limit the number of times people could use such loans, said CREW.
Left out in the cold indeed...and I don't see anything changing anytime soon. It's getting more obvious to me every day that help for the American people is nowhere in sight. Ms. Sloan had the best quote:
"Unfortunately, real reform of our system would require lawmakers to bite the hand that feeds them. I won’t hold my breath.”
http://www.citizensforethics.org/...