- 2012elections - 9/11 Special Coverage - aca - africanamericanalzheimers - aids - Alabama News Network - american - Awards & Expo - bees - bilingual - border - californiaeducation - Caribbean - cir - citizenship - climatechange - collgeinmiami - community - democrats - ecotourism - Elders - Election 2012 - elections2012 - escuelas - Ethnic Media in the News - Ethnicities - Events - Eye on Egypt - Fellowships - food - Foreclosures - Growing Up Poor in the Bay Area - Health Care Reform - healthyhungerfreekids - howtodie - humiliating - immigrants - Inside the Shadow Economy - kimjongun - Latin America - Law & Justice - Living - Media - memphismediaroundtable - Multimedia - NAM en Espaol - Politics & Governance - Religion - Richmond Pulse - Science & Technology - Sports - The Movement to Expand Health Care Access - Video - Voter Suppression - War & Conflict - 攔截盤查政策 - Top Stories - Immigration - Health - Economy - Education - Environment - Ethnic Media Headlines - International Affairs - NAM en Español - Occupy Protests - Youth Culture - Collaborative Reporting

Payday Lenders Find Lobbying Pays Off Big

Black Voice News.com, News Report, Chris Levister Posted: Apr 09, 2009

Just as big bank bailouts have consumers seeing red big lobbying payouts have the payday loan industry seeing green.

Thanks to an aggressive lobbying campaign some of the nations best arm twisters are dispensing huge sums of cash to lawmakers.

Facing increasing backlash from Congress and consumer groups for its controversial lending tactics the payday loan industry is enjoying new clout from some of the very lawmakers who once sought to exterminate them.

Lawmaker Rep. Louis Gutierrez D-Ill has backed away from banning the practice of making very short term loans with extremely high interest rates in favor of legislation that would regulate it.

He says as job losses soar and the payday lending industry ramps up lobby spending, his proposal protects borrowers and establishes controls.

Consumer groups are livid calling the proposed legislation a loop hole ridden gift to the payday industry. They say it does little to crack down on the industrys most egregious practice of advancing a borrowers next paycheck saddled with finance charges that typically range around a 400% APR and higher. Critics of Gutierrezs proposal have company but for different reasons. Lenders say his measure goes too far and would devastate the industry. The legislation would cap the annual interest rate for a payday loan at 391 percent and ban so-called rollovers where a borrower who cant afford to pay off the loan simply renews it and agrees to pay hefty penalties and fees.

Consumer groups say the legislation falls short of protecting consumers taken in by the lure of emergency cash. Some critics say the industry has vowed to fight the Gutierrez measure in favor of a less suffocating one introduced by Rep. Joe Baca D-San Bernardino. Baca last week introduced payday legislation that would allow some rollovers and pre-empt state laws, which would effectively open the door for businesses to operate in states that currently make payday lending practices difficult or impossible. Bacas proposal perceived by the industry as more friendly, would also allow online lenders to charge higher fees than those in fixed locations.

The Online Lenders Alliance, which was formed in 2005 saw its fortunes rise after nearly quintupling its 2007 and 2008 lobbying expenditures to $480,000. The group also sponsored several fundraisers for lawmakers including Baca, according to data collected by the Sunlight Foundation, which tracks political donations. Baca says he is unaware of receiving any financial support from payday lenders or their lobbyists. He defended the need for oversight legislation saying emergency loans are a reality and the only resource some borrowers have to get fast help.

Related Articles:

Black America Remains a Largely Untapped Financial Market, Report Says

NAACP Accuses Banks Of Racism

Latinos Trapped in Debt

Page 1 of 1




Just Posted

NAM Coverage

Civil Liberties

Why There Are Words

Aug 10, 2011