Government

The Trump Administration Is Trying To Bring Back Payday Loans Since Putting Crack Directly Into Urban Water Would Be Too Complicated

There's an evil Trumpworld that never sleeps.

By  
on

It is impossible to actually justify the payday loan industry. Its entire function is to victimize poor people who are already in financial distress.

Payday lenders present themselves as if they are offing poor people an “advance.” You get paid on Friday but you have a bill or something due Tuesday so they give you some of your money upfront. If you are poor, financially illiterate, or just in great distress, this sounds like an excellent deal. You’re living from paycheck-to-paycheck, from crisis to crisis, an advance on your pay can seem to help.

But, it’s not an advance, it’s a “loan.” And the lender chargers exorbitantly high rates off your paycheck. One company in Kansas was caught charging 950% interest. THE MOB DOESN’T CHARGE THAT MUCH. Payday lending is to usury as premeditated murder is to homicide.

The Consumer Financial Protection Bureau — an institution Republicans almost comically hate — sued that Kansas company, and was promulgating payday lending regulations to stamp out the practice. But then Donald Trump took office and, since his only animating principle is to undo whatever Obama tried to do, he is trying to make the world safe for payday lenders. From Bloomberg:

The Consumer Financial Protection Bureau is dropping a lawsuit against a group of payday lenders associated with an American Indian tribe in a sign the regulator is changing direction under Mick Mulvaney, the acting director appointed by the Trump administration…

“It’s an earth-shattering change,” said Christopher Peterson, a former CFPB employee who left the agency in 2016 and is a law professor at the University of Utah. “This is signaling that the CFPB is going to stand down on the online payday lenders who refuse to comply with state interest-rate caps.”

Earlier this week, the CFPB rewrote its Obama era rules designed to restrain payday lenders.

Reasonable people can disagree on the appropriate level of government regulation on the banking industry. But if you honestly think payday lenders should be free to prey on poor people then I can only conclude that you are not a reasonable person, but an evil one. This isn’t “banking.” This is taking advantage of desperate people, without bargaining power, who lack the information and literacy to protect themselves. The economic model of the payday loan is to TRAP people in a cycle of debt from which they cannot recover. Again, we’re talking about something that is more like racketeering than banking.

Sponsored

Of course Trump supports it. HE’S A CON MAN AND A BAD PERSON. Payday lending is right up his alley.

But right here is proof of what everybody has to “lose” when they vote for a sexist bigot. The policy, directly, hurts vulnerable people. The Trump administration is TRYING to hurt those people. This isn’t wrong, it’s evil.

CFPB Signals Shift by Dropping Payday Lender Lawsuit [Bloomberg]

Elie Mystal is the Executive Editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

Sponsored

Topics

, ,