Commentary

Corruption tag team: NC congressman revives payday lending; Trump administration produces “romance scam” placemats

Rep. Patrick McHenry

If you ever harbor any questions as to what Trumpism looks like in all of its corrupt, dog-eat-dog, predatory splendor, there are two classic examples from our nation’s capital today to jog your memory.

Exhibit One is the laughably entitled “Protecting Consumers’ Access to Credit Act of 2017” — a bill on which the House of Representatives is scheduled to vote today at the behest of its chief sponsor, North Carolina congressman Patrick McHenry. As you probably surmised, the measure has nothing to do with protecting consumers and is instead a blatant attempt by the payday lending industry’s favorite congressman to revive the discredited and predatory practice nationwide. This is from an alert distributed by actual consumer advocates:

“The U.S. House of Representatives is set to vote on HR 3299 this week, a bill that would let 400% payday lenders evade North Carolina’s strong interest rate caps by partnering with an out of state bank.

When payday lenders were kicked out of North Carolina in 2001, some used an illegal backdoor ‘rent a bank’ scheme to keep making 400% payday loans in our state for five more years. Our NC Attorney General and Commissioner of Banks were the first state regulators to put an end to this sham arrangement, forcing the last payday lenders out of North Carolina in 2006.

Now a bill is moving in Congress that would undo this victory. This bill would bless these ‘rent a bank’ schemes and encourage them to spread by legalizing loans that are briefly originated by a bank, no matter how high the interest rate, even if the bank has little involvement and the loans are immediately sold to a payday lender.

Representative Patrick McHenry sponsored this bill and all three House Financial Services Committee members from North Carolina voted to support this dangerous bill: Reps. McHenry (R, NC-10), Robert Pittenger (R, NC-09), and Ted Budd (R, NC-13).”

Sadly, none of this is a particular surprise. McHenry was an avid apologist for the payday sharks during his brief and undistinguished tenure in the General Assembly and has been one of the industry’s most loyal lapdogs in Washington. Unfortunately, the rise of Trumpism has provided new momentum to his destructive scheming and the bill will be tough to stop. If it passes the House, consumer advocates are hoping that the Senate will keep the measure from finding its way to the desk of the Predator-in-Chief and the corrupt lackeys he has installed at the Consumer Financial Protection Bureau.

Speaking of the CFPB, its latest malfeasance is today’s Exhibit #2. This week, the bureau abandoned litigation that had been launched under Obama appointees to crack down on a predatory lender that was charging thousands of consumers 950% interest on loans. And, what you might ask, is the bureau proposing to do instead? According to a news release yesterday — we are not making this up — it will now devote significant attention to producing “romance scam” placemats. This is from the news release:

“Dear Colleague,

The CFPB created a new romance scam prevention placemat to help older adults who might fall under the spell of a scam artist. The placemat is part of a series of consumer education placemats that meal service providers deliver to homebound seniors and senior meal sites. The placemats are free to download or order in bulk.

Please see the blog post below to learn more: 
www.consumerfinance.gov/about-us/blog/guard-your-wallet-well-your-heart-romance-scams/

Thank you,

Office of Community Affairs
Consumer Financial Protection Bureau”

Don’t you feel safer now?

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