Do you believe in coincidences? On scanning my google news feeds in recent days, there was an item that caught my eye. And it was one of those things that kept sticking in my head.
We all know how Obama Campaign manager Steve Hildebrand is pushing hard to go after short term lenders in South Dakota, and has similarly minded Democrats and liberals following in his wake. There has always been rumbling that there was national backing for his effort, and a recent campaign finance report notes that a special interest group, Center for Responsible Lending, has been backing the measure with support.
Remember the name of that organization – as the Center for Responsible Lending is very noteworthy, as are the founders of the group.
Center for Responsible Lending founders Herbert and Marion Sandler have ties to the subprime banking crisis, which you can read about as detailed by CBS’s 60 minutes in 2013.
In fact, Herb and Marion Sandler were legendary. In 1963, they started Golden West Financial and grew to 285 branches under the name World Savings. The Sandlers’ were known for careful, conservative lending. They’ve given away millions of dollars to charity and started an advocacy group for low income borrowers called the Center for Responsible Lending.
In 2006, just before the housing crash, the Sandlers sold their bank to Wachovia and pocketed $2.3 billion.
Wachovia was so badly wounded, it was acquired by Wells Fargo with the help of a taxpayer bailout.
So, after cashing out prior to the subprime crash, they started this organization… an advocacy group for low income borrowers called the Center for Responsible Lending. Here’s where it just drips with irony, and it gets better when you start looking at what this “advocacy group” has been up to besides assisting the Hildebrand effort.
According to Politico just this past November:
The Center for Responsible Lending spent hours consulting with senior Obama administration officials, giving input on how to implement the rule that would restrict the vast majority of short-term loans.
At the same time, the group’s financial services business, Self Help Credit Union, was pushing CFPB (Consumer Financial Protection Bureau) to support its own small-dollar loan product with a much lower interest rate as an alternative to payday loans.
The emails between CRL and CFPB staffers document regular meetings and close collaboration. In November 2013, as it was researching regulations, CFPB requested data from the nonprofit on payday lenders “to help focus these efforts.” The next month, a staffer for the Center for Responsible Lending requested a copy of the agency’s overdraft analysis “so that CRL could make sure ours was as parallel as possible.”
That spring, David Silberman, associate director for research, markets and regulations at the CFPB, requested an outline on payday lending from CRL President Mike Calhoun. Calhoun replied, “Feel free to improve it!”
Wait, what? So, as they’re backing Hildy in an effort to kill short term lending, they’re pushing for government support of their own backed product? It gets better. As related yesterday from NASDAQ:
The Consumer Financial Protection Bureau, preparing to roll out rules aimed at reining in high- interest payday loans, is jawboning banks and credit unions to provide better alternatives for borrowers in need of small, short-term loans.
The Treasury Department is also pushing an alternative to payday lending. Its budget for fiscal 2017, unveiled Tuesday, includes funds to help community development financial institutions extend small-dollar loans. The budget sets aside at least $10 million to provide technical assistance and to cover potential loan losses incurred by these lenders, which fund development projects in financially struggling communities.
The payday lending rule, expected to be formally proposed within the next few months, represents the federal government’s first comprehensive attempt to curb payday lending, which can carry annual interest rates exceeding 400%. While millions of Americans lack access to bank accounts, payday customers—who pledge repayments through automatic withdrawals on their paychecks—do have regular bank accounts.
So, let’s summarize the chain of events: After making 2.3 Billion off of selling a bank, which took the buyer under and required a government bailout, the Center for Responsible Lending (CRL) was founded by the bank sellers as “an advocacy group for low income borrowers.”
At the same time the Center for Responsible Lending started backing a push to create a ballot initiative in South Dakota to crush the private short-term lending industry, they “spent hours consulting with senior Obama administration officials, giving input on how to implement the rule that would restrict the vast majority of short-term loans.” And simultaneously, they were “pushing CFPB (Consumer Financial Protection Bureau) to support its own small-dollar loan product with a much lower interest rate as an alternative to payday loans.”
And just yesterday, the very government agency they were documented as working directly with announces they’re introducing payday loan regulations, while another agency announces they’re pushing an alternative for payday loans, backed by the government to cover potential losses incurred for banks and credit unions. Credit Unions such as the “Self Help Credit Union” operating under Center for Responsible Lending’s umbrella.
If I was going to make the description a little conspiratorial, it might be “kill the private short term lending industry, set up government guarantees for alternative programs, and clean up in the marketplace while assuming no risk.”
If we were going to accept that, that would make the Hildebrand backed effort not just more social engineering & public assistance from the Democrats to create an “Obama Loan” system, just like “Obama Care” and “Obama Cars” (aka Cash for Clunkers), it would be part of an effort where someone is going to make money. A lot of money.
Of course, this is probably just speculation.
If you believe in coincidences.