A while back, I noted the Community Financial Services Association, who is affiliated with the group behind South Dakota’s payday lending ballot measure, the Center for Responsible Lending (CRL), has been making moves towards creating their own taxpayer backed payday lending product. Which explains greatly why the CRL is trying to eliminate 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.
Sound conspiratorial? You might dismiss it that way. But the Wall Street Journal didn’t think so in yesterday’s editorial:
So why does the CFPB want to nationalize payday regulation? Pressure from interest groups, particularly the Center For Responsible Lending, which has been lobbying the bureau about payday evils since at least 2013.
Emails obtained under the Freedom of Information Act by the trade group the Community Financial Services Association show that the CFPB sought regular input from the Center to “focus these efforts,” to quote one. The Center’s President Mike Calhoun passed along a draft report to a CFPB director, who was invited to “Feel free to improve it!”
But even moralists gotta make a buck. The Center has an affiliate, the Self-Help Credit Union, with $600 million in assets that would love the CFPB’s blessing to compete with payday shops on short-term loans. The Center’s influence spans far: Mark Pearce ran the place for a decade before jumping to the FDIC to help with Operation Chokepoint, a coordinated government effort to investigate banks that conduct legal transactions with payday lenders.
The larger issue with all these do-gooders wanting to introduce more government into our lives? No one is really asking for it, except the community organizers themselves:
CFPB officials are swanning around as protectors of the proletariat, claiming the new rules will end a “cycle of debt” in which borrowers are conned into taking out one exorbitant loan after another. Yet customers—most of whom earn between $25,000 and $50,000—tend to know what they’re doing. One recent survey by Harris Interactive suggested that more than 90% of customers “weighed the risks” carefully and agreed the lender “clearly explained the terms.” A Columbia Law study found borrowers could predict accurately when they’d be able to pay back the loan.
A minority of borrowers roll over loans and end up paying more in fees. Yet a New York Federal Reserve Bank analysis in October noted that the evidence these customers were hoodwinked is “limited and mixed” and too scant to justify obliterating the industry. The report dispensed with other critiques that “don’t hold up under scrutiny,” including that payday lenders target minorities, who are no more likely to take out a payday loan than a white person in similar circumstances.
“Critiques that “don’t hold up under scrutiny” concisely sums up what American citizens face as liberal culture warriors try to impose their values and socialism on the rest of us. And their latest tactic is to destroy a financial sector “because they just know,” despite a mountain of evidence that proves them wrong.
I just hope people start to care before we find ourselves all standing in line in the new Soviet Union.