fuagf, you can site all the articles you want in defending PayDay predatory loan practices. There are many, MANY more condemning them as legalized loan sharking bottom-feeders preying on the poor working people of this country.
To ridicule my penchant for embracing a simple premise like, a lender should only loan to people that can repay in defending your blood-sucking industry is odious.
Let Elizabeth Warren explain it to you:
Still unconvinced? Dave Ramsey has an answer...
QUESTION: A Twitter listener asks how payday loans work and why they're located in seedy areas or near military bases. Dave explains.
ANSWER: Because they're an absolute rip-off. They're scum-sucking bottom feeders. These people are horrible. The average payday lender makes an annualized rate of return in excess of 700–-800% iterest. They do it in small quantities so people can swallow this stuff, but basically, they'll take something like a $200 advance and have you write them a check for $225. Two weeks later, they cash your check for $225. That's a payday lender. If you annualize a $25 interest rate over two weeks on $200, if you were to go back time and again and do this, you would be paying 800% o your money, and lots of people are serial payday lender customers. They get stuck in this horrible deal and can't get out.
Military bases are a little different because the federal government said that payday lenders were abusing the military and have limited them on what they can charge to the military. They can't make 800% o the military—only about 33% anually.
The bottom line is they're in poor areas of town because rich people would never allow themselves to get ripped off that far If you are broke, you will become rich when you do rich people stuff with your money. Find out what the habits of rich people are and do them, and you will become one of them. How do I know this? Seventy-eight percent of America's millionaires are first- generation rich. They started with nothing and became millionaires. If you do poor people stuff with your money, you will become poor people. If you are rich and you do poor people stuff with your money, you will become poor people. "Rich" isn't an amount of money; it's a mindset in how you live. I've been broke, but I've never been poor because when I was broke, I just had no money. It wasn't that I had no hope. It wasn't that I didn't believe I could win. It wasn't that I was unwilling to sacrifice. But if you will look around the poor ends of town, you will see some of the things that make people poor if you keep doing business with them. A payday lender is one of them. Title pawn shops are another. Rent-to-own is another. For goodness' sakes, the quarter laundry is one of them. Tote the note lots where you put almost as much down on the car as it's worth and they charge you almost double for the car plus the interest, which by the time all that's done is as much as triple. These are not things you see in the rich end of town for two reasons. Rich people would never do that kind of a thing because no matter how desperate they are, they know it would make them poor.
The vast majority of lottery tickets are sold in poor ZIP codes, the bad end of town. Rich people don't buy lottery tickets. The reason they don't buy lottery tickets is because it doesn't work, stupid! It's not any harder than that. The other reason you don't see these horrible businesses in the rich end of town is because the people that oppress the poor—take advantage of the poor—run those types of businesses. They tend to keep them poor. They know who they can feed on. The last reason is because they don't work and don't handle themselves. You get to make choices if you're poor and not be poor anymore in the United States. You do have that opportunity. https://www.mytotalmoneymakeover.com/index.cfm?event=dspAskDave&intContentItemId=117479
Wasserman Schultz Has a Change of Heart, But Too Little, Too Late
The DNC chair and Florida congresswoman changed her mind on an important issue but she and other corporate Democrats continue to betray the legacy of their party.
By Bill Moyers and Michael Winship | June 7, 2016
Return with us now to the saga of Debbie Wasserman Schultz and the soul of the Democratic Party.
First, a quick recap: Rep. Wasserman Schultz (D-FL), chair of the Democratic National Committee, also has been an advocate for the payday loan industry. The website ThinkProgress even described her as the “top Democratic ally” of “predatory payday lenders.” You know — the bottom-feeding bloodsuckers of the working poor. Yes, them.
Low-income workers living from paycheck to paycheck, especially women and minorities, are the payday lenders’ prime targets — easy pickings because they’re often desperate. Twelve million Americans reportedly borrow nearly $50 billion a year through payday loans, at rates that can soar above 300 percent, sometimes even beyond 500 percent. Bethany McLean at The Atlantic recently reported that the government’s Consumer Financial Protection Bureau (CFPB) studied millions of payday loans and found that “67 percent went to borrowers with seven or more transactions a year and that a majority of those borrowers paid more in fees than the amount of their initial loan.”
Yet when the CFPB was drawing up new rules to make it harder for payday predators to feast on the poor, Rep. Wasserman Schultz co-sponsored a bill to delay those new rules by two years. How, you ask, could the head of the party’s national committee embrace such an appalling exploitation of working people?
Just follow the money. Last year, the payday loan industry spent $3.5 million lobbying; and as we wrote two weeks ago, in Wasserman Schultz’s home state, since 2009, payday lenders have bought protection from Democrats and Republicans alike by contributing $2.5 million or so to candidates from both parties, including her. That’s how “Representative” Wasserman Schultz, among others, wound up representing the predators instead of the poor.
That position became a major issue in her campaign for reelection to the House this year — she has a primary opponent for the first time since she entered Congress — and was even threatening the prospect of her continuing as DNC chair and presiding over the Democratic National Convention next month in Philadelphia. More than 40,000 have signed a petition calling for her removal from that post. How, you ask, could the head of the party’s national committee embrace such an appalling exploitation of working people?
She had become a symbol of the failure of Democratic elites to understand that there is an uprising in the land. Millions of Americans are rebelling against the leadership of both parties. They are fed up with inside-the-Beltway politicians who pay only lip service to the deep needs of everyday people and the country; fed up with incumbents who ask for their votes, are given them in good faith, and then return to Washington to do the bidding of the donor class and its lobbyists.
Donald Trump gets it. He has roiled and humiliated and conquered an out-of-touch Republican establishment in Washington that also ignored the popular uprising against corporate domination and crony capitalism, and now GOP titans such as Senate Majority Leader Mitch McConnell and Speaker of the House Paul Ryan, spear carriers for Big Money, are being hauled around the talk-show circuit in Trump’s tumbrel, eating crow and swearing fealty to the misogynistic, bigoted and pathologically lying brute who bestrides their party.
Democratic insiders like Wasserman Schultz, however, continued to whistle past the graveyard, believing that the well-funded and well-connected Clinton machine — and general fear of a Trump regime — were enough to carry them to victory in November, despite the grass-roots disgust with a party that reeks of rot from the top. Once the champions of people who came home from work with hands dirty from toil and sweat, too many establishment Democrats went over to the dark side, taking up the cause of the well-manicured executives (think: Goldman Sachs) who write the checks and the mercenaries who deliver them (for a substantial cut, of course).
The lust for loot which now defines the Democratic establishment became pronounced in the Bill Clinton years, when the Clinton-friendly Democratic Leadership Council (DLC) abandoned its liberal roots and embraced “market-based solutions” that led to deregulation, tax breaks, and subsidies for the 1 percent. Seeking to fill coffers emptied by the loss of support from a declining labor movement, Democrats rushed into the arms of big business and crony capitalists.
Another case in point (and, alas, there are many): the Democratic governor of Connecticut, Dan Malloy, who seems to treat his state’s corporate residents far better than the 1 in 10 of his citizens who live at or below the poverty line. Too many establishment Democrats went over to the dark side, taking up the cause of the well-manicured executives (think: Goldman Sachs) who write the checks and the mercenaries who deliver them (for a substantial cut, of course).
At International Business Times last week, investigative reporter David Sirota analyzed the proposed merger of Cigna and Anthem Blue Cross Blue Shield, a deal that would create the biggest health insurance company in the country. Cigna is based in Connecticut and Katharine Wade, the state’s insurance commissioner, appointed by Governor Malloy, is a former Cigna lobbyist with deep family ties to the company.
Sirota reported:
“Malloy’s decision to appoint Wade to such a powerful regulatory post on the eve of the merger was not made in a vacuum,” Sirota reported. “It came after employees of Cigna, its lobbying firm Robinson & Cole and Anthem delivered more than $1.3 million to national and state political groups affiliated with Malloy, including the Democratic Governors Association (DGA), the Connecticut Democratic Party, Malloy’s own gubernatorial campaign and a political action committee supporting Connecticut Democrats [our italics].
Since Malloy’s first successful run for governor in the 2010 election cycle, donors from the insurance companies and the lobbying firm have given more than $2 million to Malloy-linked groups, according to the figures compiled by PoliticalMoneyLine and the National Institute on Money In State Politics. Almost half that cash has come in since 2015, the year the merger was announced.
Sirota now reports that since his investigation first was published, the state has “formally denied open records requests for information about their meetings with Cigna and Anthem, and declared that ‘any’ documents about the health insurance companies’ proposed merger that haven’t already been made public will be kept secret.” His FOIA request was turned down “one day after Anthem requested [state insurance commissioner] Wade approve an average 26 percent increase in health insurance premiums for individual plans.” So much for transparency.
And while we’re in Connecticut, let’s also take a look at what Malloy is doing for the world’s biggest hedge fund — Bridgewater Associates, based in his state, with an estimated worth of $150 billion. The founder of the firm, Ray Dalio, is the richest man in Connecticut, by one estimate weighing in at $14.3 billion.
Dalio made $1.4 billion in 2015 alone, according to Institutional Investor’s Alpha magazine. That same year, his top two executives pulled in $250 million each. Yet as part of Connecticut’s campaign to keep companies from leaving the state, Malloy is taking $22 million of the public’s money and giving it to Dalio to stay put.
You might think a Democratic governor would have thrown down the gauntlet and told Bridgewater’s top three, “Get outta here! You guys made almost $2 billion among yourselves. Shake your piggy bank or look under your sofa cushions for the $22 million; we’re not milking the public for it.”
But no, Malloy and his fellow Democrats buckled. Buckled to the one-tenth of the one-tenth of the one-hundredth percent of the rich. Ordinary taxpayers will now ante up.
So given all of that, guess who’s the chairman of the platform committee for the upcoming Democratic National Convention? Right: Dan Malloy, governor of Connecticut, subsidizer of billionaires. Guess who named him? Right again: Wasserman Schultz, “top Democratic ally” of “predatory payday lenders.” We’re not making this up.
Not only will Malloy be presiding over the priorities of the Democratic platform at the convention next month, he doubtless will be making the rounds with Wasserman Schultz and other party elites as they genuflect before the corporate sponsors and lobbyists she has invited to pay for the lavish fun-and-games that will surround the coronation. Many of those corporate sponsors and lobbyists have actively lobbied against progressive policies like health-care reform and a Wall Street cleanup and even contributed large sums to Republicans. Yes, we know, shocking.
So take the planks in the platform and the platitudes and promises in the speeches with a grain of salt. It’s all about the money.
Except when it’s not. Except for those moments when ordinary people rise up and declare: “Not this time!”
Which brings us back to predatory lenders and their buddy, Debbie Wasserman Schultz.
Look around: There’s an uprising in the land, remember, and it isn’t going away after Hillary Clinton, now the presumptive nominee, is crowned. This year even Wasserman Schultz couldn’t ignore the decibel level of an aroused public. Unaccustomed to a challenge in the Democratic “wealth primary” where money usually favors incumbents, she now finds herself called to account by an articulate opponent who champions working people, Tim Canova. Across the country tens of thousands of consumer advocates — and tens of thousands of other progressives angry at her perceived favoritism toward Hillary Clinton — have been demanding that Wasserman Schultz resign as the party’s chair or be dumped before the convention opens Philadelphia. Look around: There’s an uprising in the land, remember, and it isn’t going away after Hillary Clinton, now the presumptive nominee, is crowned.
So last week the previously tone-deaf Wasserman Schultz perked up, did an about-face and announced she will go along with the proposed new rules on payday lending after all. At first blush, that’s good; the rules are a step in the right direction. But all that lobbying cash must have had some effect, because the new rules only go so far. A New York Times editorial calls them “a lame response” to predatory loans and says the final version of the new regulations “will need stronger, more explicit consumer protections for the new regulatory system to be effective.”
Nick Bourke, director of small-dollar loans for the Pew Charitable Trusts, is a man who closely follows these things and got to the heart of the matter: Not only do the proposed new rules “fall short,” they will allow payday lenders to lock out attempts at lower-cost bank loans. His judgment is stark:
As drafted, the CFPB rule would allow lenders to continue to make high-cost loans, such as a line of credit with a 15-percent transaction fee and 299-percent interest rate, or a $1,250 loan on which the borrower would repay a total of $3,700 in fees, interest and principal,” Bourke wrote. “These and many other high-cost payday installment loans are already on the market in most states, and they will thrive if the regulation takes effect without change.
Nonetheless, the new rules were improvement enough for Allied Progress, an organization that has taken on Wasserman Schultz in Florida’s late August primary, to declare victory. And they were enough for Wasserman Schultz to do a 180-degree turn which she clearly hopes will not too dramatically reveal her hypocrisy. “It is clear to me,” she said, “that the CFPB strikes the right balance and I look forward to working with my constituents and consumer groups as the CFPB works toward a final rule.”
All well and good, but if she survives her primary to return to Washington, be sure to keep the lights on in those rooms where the final version of the rules are negotiated. A powerful member of Congress with support from a Democrat in the White House could seriously weaken a law or a rule when the outcome is decided behind closed doors and money whispers in the ear of a politician supplicant: “I’m still here. Remember. Or else.”
But the times, they really may be a-changing, as the saga of Wasserman Schultz reveals. You can be deaf to the public’s shouts for only so long. The insurgency of popular discontent that has upended politics this year will continue no matter the results in November. For much too long now it’s been clear that money doesn’t just rule democracy, it is democracy.
Almost everyone has experienced a temporary financial shortfall at one time or another. When facing a money crisis caused by a sudden emergency, the loss of a job, or higher- than-expected expenses, the common course of action has always been to tighten your belt, find a way to save wherever you can, maybe sell something of value that you own, and, as a last resort, perhaps borrow some money from friends or family members if there is no other way to get out of trouble.
But we live in an age where easy money has never been easier, thanks to the practices of the banksters and the other chargers of usury, who are always standing by ready to lend a hand – as long as you agree to pay them back the whole arm in return, of course. The moneylenders have now become so influential that they have actually gained the power to take down the entire world economy, which they almost did back in 2008. Money lending and credit-granting practices of all types have, for some unfathomable reason, been allowed to become the backbone of our entire financial and economic system, as virtually all of our most basic productive activities are now being backed in some way by usurious practices that are draining the very lifeblood from the real sources of America’s wealth, most especially its working men and women.
While the banks and the credit card companies are bad enough, it is the scalawags from the payday lending industry who have taken usury to a whole new level. For those who are not familiar with how this scam works, payday lenders grant short-term loans of between $500 and $1000 at astronomical interest rates to people who are facing financial difficulty and need money fast. Secured by post-dated checks at physical locations or by bank account information when taken out online, payday loan recipients usually have two weeks to pay back the money, plus a fee that will range from 15 to 20 percent of the original loan amount. If for some reason they cannot pay, then interest charges will start to accumulate and will continue to accumulate for as long as the debt remains out standing. As hard as it might be to believe, the annual percentage rate of payday loan interest can run as high as 400 to 500 percent – and yes, at the present time, charging this amount of interest is entirely legal. If the Godfather Don Corleone were alive today, he would have undoubtedly left the Mafia behind to start his own payday loan company.
One of the big attractions of payday loans for borrowers is that they do not require a credit check the way a regular bank loan or a credit card application would – people with bad credit or no credit at all can get loans fast if they have a job and a checking account and can show the payday lender some evidence of their income. Payday loan companies advertise themselves as knights in shining armor, ready to come to the rescue of anyone who suddenly finds themselves in a tight spot and in need of cash quickly, but of course no one is required to prove exactly what they plan to do with the money. So while these lenders supposedly exist to help those facing unexpected financial problems caused by health issues, car troubles, theft, fire, and so on, research has revealed that most people actually take out payday loans to pay their rent, buy food for their children, or cover the cost of their utility bills. Basically, the payday loan industry exists to exploit poor people, especially those with families, who are desperately trying to survive and feel like they have no choice but to ask for money now even if they are not sure they are going to be able to pay it back.
A Business Model Of Evil Ideally, someone would only take out a payday loan if they truly were facing an emergency and would have little problem paying back the loan once their next paycheck is cashed. But this is not how it works out in the large majority of the cases. Most payday loan recipients are repeat offenders, so to speak, and despite the fact loans are supposedly due for repayment in two weeks, a study by the prestigious Pew Center discovered that people who borrowed from payday loan companies were indebted for an average of five months during the year in which the money was borrowed. Revealingly, 76 percent of all new payday loans taken out during any given year will go not just to repeat customers, but to those who had a previous loan come due within the previous two weeks. What this means is that most of these loans go to borrowers who already had one loan, couldn’t repay it, and had to take out another loan just to pay off the original.
Anyone with even the slightest understanding of how interest works will realize immediately that the practice of taking out loans to pay off loans will only put a person deeper and deeper into debt, but in reality this is exactly the pattern that allows the payday loan industry to rake in the big profits. For payday loan companies, customers who take out an original loan with a $15 fee added would need to receive between four and five loans in sequence before they would actually represent a good investment, which means that these lenders absolutely count on loan recipients being forced to roll over their debt repeatedly, paying more and more interest until they have been bled almost completely dry.
When you have an industry whose profits are entirely based on taking advantage of those without choices, it is hard to imagine how such a business can even be allowed to exist. In fact, fifteen states have now prohibited payday loan operators from setting up shop in their jurisdiction, while eight others allow these companies to exist but regulate loan terms to make things better for borrowers. At the federal level, the Consumer Financial Protection Bureau was created to begin regulating this industry more completely, although just exactly what this organization plans to do is not clear at the moment.
But what certain members of Congress hope to do in the near future is crystal clear. Rather than reigning in the usurious payday loan vultures, who in the past have essentially operated as a non-violent legalized version of the loan shark industry, these legislators would instead like to set the payday loan companies loose on a new reign of terror that could send their profit margins soaring to previously unimaginable levels.
A Rose By Any Other Name Still Has Its Thorns The innocuously entitled HR 6139, sponsored by Reps. Luetkemeyer (R-MO) and Baca (D-CA) expresses its intention to create a federal charter for “National Consumer Credit Corporations,” which is just another fancy name for payday loan companies. These National Consumer Credit Corporations, as they will now be called, are the online payday lenders, who undoubtedly represent the future of this dirty business. As of 2012, about three-fourths of the loans given out by the industry have been distributed through storefront operations, but the other 25 percent have come in the form of internet payouts by companies that operate exclusively in cyberspace. With laws being passed in so many states restricting the usurious depredations of the storefront-style payday lenders, however, estimates are that by the year 2016 over 60 percent of all payday loans will be taken out electronically, and this percentage will likely grow even further as time advances.
In other words, in the years to come, the big money in legalized loan sharking will be made online, which perhaps explains why some in the House of Representatives suddenly want to create a new federal charter system that would require the Comptroller of Currency to issue licenses to online payday lenders that would exempt them from any state control. In overlooking the tenth amendment’s admonition that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people,” the House sponsors of this bill hope to do an end run around the perfectly reasonable attempts by states to regulate the practices of all predatory usurers, including those working online, who wish to exploit the economic troubles of their most vulnerable taxpaying citizens.
If HR 6139 eventually passes – and the fact that it has bipartisan sponsorship is an ominous sign – it will lead to the creation of a rogue industry that is left completely free to pick the bones of those who are struggling to survive in a dying economy. To show how biased in favor of the rotten payday loan industry this bill really is, it would actually eliminate the requirement that these companies disclose to their customers how much they will have to pay in interest if they don’t pay back the money on time. The bill would require Internet lenders to discard the fourteen-day repayment limit in favor of one that lasts for at least 30 days, but this is really just another attempt to help a discredited industry re-brand and re-invent itself so that the public will not realize the type of shady characters they are actually dealing with.
Usury With A Vengeance
“If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.” Exodus 22:25
If there is one thing the Bible is clear about, it is that usury, or the charging of abnormally high interest on money that has been lent to someone in need, is a practice that should be condemned and prohibited. And as the above quote from Exodus makes clear, usurious exploitation of the poor is considered an especially grievous sin that should not be tolerated in any civilized society. But in a global economy that has shown itself willing to sacrifice any moral principle if that is what it takes for powerful actors to accumulate more wealth, the religious, ethical, and historical sanctions against usury have been dismissed as quaint notions best left to another age. We now have a financial system that is completely controlled by greedy bankers and others who have found a way to make money off of money while adding nothing useful to the world’s inventory of goods and services, and the payday loan industry is a particularly despicable example of this type of parasitical operation.
The only advice we can give those who are struggling to stay afloat in an economy that no longer rewards hard work and honesty is to avoid these predatory lenders at all costs. No matter how grim your situation might seem now, if you choose to do business with payday loan companies, things are likely to get very much worse before they start to get better.
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