BUT, they need to hear from consumers- that means you! We have an easy-to-use page where you can weigh in- it only takes a minute and will help bring about important consumer protections with these loans. Please share a line or two in the comments box about why you care about this issue and want to see strong federal reforms.
1. They’re spending a LOT of money on politicians BUT money can’t always buy you love
The payday lending industry has always “invested” gobs of money in politicians and elected officials as a way to fight off state-level regulation. According to a new report from Americans for Financial Reform, the industry must be really worried. They spent over $15 million in campaign contributions during the 2013-14 campaign cycle. Some notable recipients include Representative Debbie Wasserman Schultz from Florida who received $31,250. Wasserman Schultz later signed onto a letter with her Florida colleagues, suggesting that the CFPB shouldn’t make payday lending rules too restrictive. In response, more than 20 Florida organizations that actually work with people who use payday loans (and see the damage caused by them), wrote a letter to the Florida delegation, reminding them that contrary to the marketing of these loans, the reality is that 63% of payday loan customers in Florida take out 12 or more loans each year.
2. Regulators are clamping down on their illegal practices:
“A huge payday lending operation based in Kansas City will be banned from offering any more loans under a $54 million settlement announced by federal regulators Tuesday.” Firms accused of faking loans, draining bank accounts settle with feds
And, World Acceptance, one of the shadiest lenders out there, also recently shared that the CFPB is investigating it: This Payday Lender Is Being Investigated by the CFPB, and the Stock Got Crushed
3. People don’t like payday loans, in fact, 75% of people want stronger regulation of them.
4. The gloves are off in exposing payday loan financiers
The HuffingtonPost broke the story that a new project run by Allied Progress will expose secrets of the payday lending industry- and who profits from it:
“We’re going to do the hard work to expose who these people are and their links to some big corporations and individuals who would prefer to stay in the shadows,” said Frisch. “We’re looking at all types of predatory lending, payday loans, car titles, check cashing, bank fees. Nothing is off the table, both nationwide and in the states, if we see that we can make an impact.”
Read more here: New Project Seeks To Unmask Shadowy Payday Lenders
Another excellent resource for unmasking the folks that profit off of the payday loan debt trap and other shady companies is a website created by Unite Here, called “Loan Shark Funds”, nicknamed after the “Lone Star Fund” that is investing in payday lenders like DFC Global, which it purchased in December 2014.
Take a look: LOAN SHARK FUNDS website:
5. Companies are heading for the exit doors
Some companies like EZ Corp are seeing the writing on the wall. The more people learn about payday, car title, and high cost installment loans, the less they like them. The company announced in July 2015 that it is no longer going to originate payday, car title, or high cost installment loans.
6. Payday Money = Dirty Money (can somebody please tell the politicians?)
Money made off of putting people in a payday loan debt trap is dirty money. Take a look at this private school that announced it was returning donations from a payday loan company that is part of a settlement with federal authorities.
7. Banks don’t want to aid and abet this predatory profit model anymore
In this case, it’s a bank in Australia: “Westpac pulls out of funding payday lenders”
According to a recent report from our allies Reinvestment Partners, (Connecting the Dots: How Wall Street Brings Fringe Lending to Main Street) there’s still some banks in the US that are willing to fund payday lenders.
Some of the largest banks include:
Wells Fargo ($WFC)
Bank of America ($BAC)
US Bank ($USB)
Capital One ($COF)
Read the report to see more excellent graphs and information like this one:
Did you like this post? Check out a few of our other most popular payday lending posts: