Lenders' Investments in Candidates, Lobbying, Paying Big Dividends
“Where enough money calls the tune, the general public will not be heard.”
– Justice Stephen Breyer, McCutcheon v. Federal Election Commission, 2014.
Payday lenders, who’ve built a lucrative business around exploiting people who have bad credit and need quick cash, are playing a popular tune in Donald Trump’s Washington.
And it’s paying off for them.
The New York Times reports today that after payday industry investments in campaign contributions ($13 million to members of Congress since 2010) and lobbying ($44 million since 2010), the Trump administration is relaxing consumer friendly regulations that were cutting into the lenders’ profit margins.
“Gone is Richard Cordray…” director of the Consumer Financial Protection Bureau, “who levied fines and brought lawsuits to crack down on usurious business practices by an industry that offers short-term, high-interest loans that critics say trap vulnerable consumers in a feedback loop of debt,” the Times reports. “In his place is Mick Mulvaney, the White House budget director and a former South Carolina congressman, who was chosen by President Trump to assume temporary control of the bureau and has emerged as something of a white knight for the payday lending industry.”
The Times notes that Mulvaney has reversed the consumer bureau’s plan to impose tight restrictions on short term payday loans. He’s also pulled the bureau out of a case against a group of Kansas payday lenders who were accused of charging nearly 1,000 percent interest on some loans. This morning, in another slap at the consumer bureau, Reuters reports that Mulvaney has called off an investigation of how the credit bureau Equifax Inc. failed to secure personal financial information for millions of Amercians that was stored in its computers.
Perhaps to seal their chummy relationship with the administration, payday industry leaders have booked a big block of rooms at Florida’s Trump National Doral Golf Club for an annual golf retreat this spring. Their patronage, like that of other business groups, Republican activists, and foreign dignitaries who’ve become regular customers at Trump-owned properties since the president took office last year, will further enrich the billionaire president.
Trump is the target of several lawsuits accusing him of violating the Constitution’s emoluments’ clause, which generally bars him from receiving gifts or payments from foreign governments
Dennis Shaul, chief executive of the Community Financial Services Association of America, the industry’s main lobbying group, told the Times that after the Obama administration’s attempts to rein in the lenders’ loan practices “we’re in a period that is relatively passive. I think it is advisable for us to largely draw a curtain on the past and try to go forward.”