DNC Chair Backs Pro-Payday Loan Bill; Thinks 300% Interest Is A Consumer Protection

[Jefferson23]

March 4, 2016

You currently can’t get Republican and Democratic lawmakers to agree on a lunch order, let alone jointly support legislation. But one controversial piece of legislation is not only garnering support from both sides of the aisle, it’s also got the Chair of the Democratic National Committee pushing for legislation that would undermine the Consumer Financial Protection Bureau’s ability to regulate predatory lending.

he misleadingly named Consumer Protection and Choice Act was introduced last fall by bank-backed Florida Congressman Dennis Ross, in response to the news that the CFPB would be drafting rules intended to curb the more predatory aspects of payday lending.

Even though the CFPB has yet to release its draft of these rules — which would then be subject to the lengthy public comment process, allowing all interested parties to chime in — the bill would not only delay the Bureau’s efforts to rein in payday lending, but would exempt states with existing restrictions on payday lending.

Ross was quickly joined by several of his fellow Floridian lawmakers, both Republican and Democrat — including Rep. Debbie Wasserman-Schultz. They contend — again, without any evidence — that Florida’s existing limits on payday lending would be undermined by the CFPB rules, and that needy borrowers would be robbed of access to credit.

https://consumerist.com/2016/03/04/dnc-chair-backs-pro-payday-loan-bill-thinks-300-interest-is-a-consumer-protection/

[think]

1. Reminds me that Bernie wants Post Offices to get into check cashing & banking:

http://www.theatlantic.com/business/archive/2015/10/bernie-sanders-lets-turn-post-offices-into-banks/411589/

[JDPriestly]

22. +10000

[Jefferson23]

28. +1 n/t

[raouldukelives]

36. Hell yes. nt

[Trajan]

2. Needy borrowers would still have access to credit

Moe the Bookie still offers a 250% rate that beats the Payday Loaners by 50% !

[NWCorona]

4. The vig is definitely better on the streets.

[mmonk]

3. One thing both parties agree on is accepting donations

from the rich to screw the poor and working poor. The names they call us that object are different at times but they both say we are extreme.

[Jefferson23]

5. +1 n/t

[Perogie]

6. DWS is a tool

and Clinton is right there with her

[toddwv]

7. DWS only kept her position because President Obama won twice.

Not that she had anything to do with it. The last two elections were pretty much catastrophes. Unfortunately, she will preside over another crucial election. It makes me a bit nervous.

[Jefferson23]

13. That's the question, why does she get to keep her job, someone approves of her job

performance.

[shadowrider]

8. I have never taken one of these loans out

but have been close to doing so many, many times. I'm now scrimping by and have no need, but I can't understand that interest rate. Hell, the mob would charge 5% per week, and this rivals that.

[Jefferson23]

10. These mobsters have nicer suits and no guns, just DC surrogates to help rob you.

I hope your situation gets better for you.

[shadowrider]

11. Thanks

3 jobs at the moment. I have a RARE evening off tonight. Bad for the pocketbook, but good for rest and sleep.

[Jefferson23]

12. Rest is necessary..enjoy! n/t

[Kang Colby]

38. Well...

5% per week, is an APR of over 265%. The mob probably has a lower default rate (I assume) and lower operating expenses.

[redruddyred]

39. if it ever comes to that i will personally crowdfund you

srs, if anyone wants to set up a DU fund i'll donate, so long as the person is a vetted member of the community
0% APR

[nc4bo]

9. How very Republican of you Debbie. So if the head of the DNC thinks like a Republican.....

and the DNC and Debbie are all-in and is backing Hillary as the nominee.......What does a "Democrat" like Hillary Rodham Clinton think?

SOMEONE needs to ask her!

[Warren DeMontague]

14. She also votes repeatedly to send terminally ill people to prison for medical marijuana use

http://observer.com/2016/03/more-reason-to-hate-debbie-wasserman-schultz-her-ridiculous-war-on-medical-marijuana/

But some still defend that shit here, because she's so fucking AWESOME.

[Jefferson23]

16. As much as I don't like how she votes and how she has conducted herself as DNC chair,

and I really don't...for me its who keeps her there that has me very angry.

It is time for me to accept the status quo of my party wants a very different Democratic
Party than I do...one reason among many I support Bernie. I am tired of this bullshit,
she crossed a line and she is not the only one, I hope she loses her seat to her primary
challenger.

[Kokonoe]

21. DWS has herself to blame, to spend all her time in Hell.

[OZi]

15. Can people go to jail for not paying those?

My understanding is people can be jailed for not paying their student loans. I feel like debtors prisons are making a come back.

[Jefferson23]

17. Depends where you live and where you rank on the food chain:

SPLC lawsuit: Alabama city operating debtors’ prison



The town is violating the rights of the poor with a practice outlawed almost 200 years ago.

The town of Alexander City, Alabama, has operated a modern-day debtors’ prison for at least a decade by arresting and jailing low-income people unable to pay their fines and court costs for traffic tickets and misdemeanors, according to a federal lawsuit filed by the Southern Poverty Law Center today.

In a town where almost 30 percent of the population lives below the poverty line, hundreds of impoverished people have been jailed or otherwise affected within just the past two years, according to the class action lawsuit that describes multiple violations of the U.S. Constitution and Alabama law. The lawsuit seeks an injunction to stop this abuse.

“It is time to stop hauling people off to jail simply because they are poor,” said Sam Brooke, SPLC deputy legal director. “Debtors’ prisons were outlawed almost 200 years ago for good reasons, but the practice has been alive and well in Alexander City for at least a decade. The city needs to realize that people’s constitutional rights aren’t determined by the size of their bank account.”

When a person appears in municipal court, the judge does not determine their ability to pay. There is generally no discussion about the right to a lawyer and they are not appointed in cases involving fines and costs – depriving defendants of their right to counsel.

https://www.splcenter.org/news/2015/09/08/splc-lawsuit-alabama-city-operating-debtors%E2%80%99-prison

[jalan48]

18. Now I don't suppose Debbie Downer has received any campaign support from these folks.

Perhaps she just thinks allowing them to charge so much is good for the economy?

[Uncle Joe]

19. And along with being against this, Bernie backs post offices being used as banks, to make it easier

on the poor and in many cases people living in rural areas that don't have easy access to banks.

On a thread by think.

(snip)

If you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it.

(snip)

http://www.democraticunderground.com/12511414103

Thanks for the thread, Jefferson.

[Jefferson23]

29. I saw that, it is a great idea. n/t

[Snotcicles]

20. Isn't her husband in Banking? nt

[Jefferson23]

32. I don't know anything about her husband. n/t

[leanforward]

23. DWS has got to go.

Demo or GOP, that type of law writing has got to go. How DWS got to the position she is in, is beyond me. A year or two ago I thought she was alright. NOT any more. She is a predator cloaked as a democratic people person.

[jfern]

24. Obama and Hillary could have her replaced in a minute if they wanted to

[Jefferson23]

30. That's what bothers me too. n/t

[Jack Rabbit]

25. Go, Tim Cano9va!!

[think]

26. Indeed... /nt

[Jefferson23]

31. I hope he wins! n/t

[Peace Patriot]

27. Talk about pay-to-play!

Unbelievable! (Well...not.)

[Jefferson23]

33. It is very bad.

I like your sig line, it is what this revolt is all about.

[Duppers]

34. Reading DU this evening...

I keep ...

[Jefferson23]

35. They don't like it, just not enough to fight back hard enough. The recipient of

said monies is not best placed to fight back. It could not be more clear what to do
next and who to support.

[Kang Colby]

37. Payday Lending...yikes.

That's a profession that I would hate to be in. Even if you offer a fair service (I assume at least one does, right? Maybe not.) Public perception is still going to be very low. My question is this - would we be better off without payday lenders?

Payday loans are meant for a short period of time, with processing fees (fixed costs for the business, and worker compensation/payroll taxes) and high default rates - I'm not sure how this business could be conducted without charging a fee that equates to roughly 250% interest when annualized. Payday lenders are the taxi cabs of borrowing, expensive over short distances, obscenely expensive over a long distance.

If someone walks in and borrows $100 and you charge them a $10 fee over a two week period. Now, that $10 has got to cover your employee wages, payroll taxes, rent, electricity, insurance, and a number of other costs including the electronic services and infrastructure to actually process these loans. We will go a step farther and say the $10 fee even includes some profit for the company. But if you annualize the $10 charge on the 2 week loan, that's a 260% interest rate without even considering compounding. In other words, the APR will be even higher.

Now, you have to deal with the default rate which is going to be high. Let's for the sake of easy math say its 6% - I'm sure it's actually higher in some areas. To cover those loses across the 12 month calendar year, you'll need to tack on another 72% interest. Now, your interest rate is 332% (APR will actually be higher due to compounding).

So, yeah, I guess I can see why a 300% rate cap is considered fair. Having said that, I don't know what the solution is. Traditional banks aren't going to lend to people with rock bottom credit scores.