Right-Wing Think Tank Shills for Payday Lenders on New York Fed Website

(The Intercept) The New York Federal Reserve Board, charged with overseeing Wall Street banks, turned over its normally staid official blog this week to a highly contentious argument in defense of high-cost payday lenders, who are partially funded by the same big firms the Fed is supposed to be regulating.

Michael Strain, a resident scholar at the ultra-conservative American Enterprise Institute think tank, co-authored the piece. While posts at the New York Fed’s Liberty Street Economics blog always caution that the views expressed do not reflect the position of the regional bank, it is highly unusual to have anyone from an ideological think tank write an article there. A review of the last three months of Liberty Street Economics posts shows no other instance of this happening.

The article, “Reframing the Debate About Payday Lending,” begins by almost taunting the many critics of payday lenders, who charge low-income borrowers upwards of 400 percent interest for short-term loans (typically due within two weeks, or the next “payday”).

“Except for the ten to twelve million people who use them every year, just about everybody hates payday loans,” Strain and his co-authors write, dramatically mischaracterizing what drives users to the services. Payday loan users typically have few alternatives to maintain their bill payments, especially as banks have denied them lending services. It is not love that motivates them; it is desperation. ................(more)

https://theintercept.com/2015/10/20/right-wing-think-tank-shills-for-payday-lenders-on-new-york-fed-website/