Payday lenders may avoid U.S. oversight

n2doc

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Thu Mar-11-10 11:19 AM
Original message

Payday lenders may avoid U.S. oversight

By Jim Puzzanghera
March 11, 2010

Reporting from Washington - Payday lenders didn't cause the economic crisis, but consumer advocates hoped their sky-high interest rates on loans would be reined in as part of a sweeping regulatory overhaul to prevent a repeat of the financial fiasco.

However, key senators feverishly working to craft a bipartisan bill want to make payday lenders -- companies that offer short-term loans to tide people over until their next paycheck -- largely exempt from oversight by a new consumer financial protection agency.

Under the draft proposal, which could become final in days, the new consumer bureau would be part of the Federal Reserve and would be able to write rules for any financial product, even if it is not offered by a bank.

But the bureau would be able to enforce those non-bank rules only against mortgage companies. Payday lenders would not be covered unless the bureau petitioned a council of federal banking regulators to give it that enforcement authority based on consumer complaints.

Without enforcement power, the new consumer agency would be unable to stop abuses, Fox said.

Corker's state is home to the nation's third-largest payday lender, Check Into Cash Inc. The company's chief executive, W. Allan Jones, and his wife have contributed $12,300 to Corker's Senate campaigns since 2004, $1,000 to Dodd and about $500,000 to federal and state political candidates overall since 1999, the nonpartisan Center for Responsive Politics said.

http://www.latimes.com/business/la-fi-payday-lenders11-2010mar11,0,1692542.story

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dixiegrrrrl

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Thu Mar-11-10 11:37 AM
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1. Amazing....jsut amazing.

and to think WE have to pay these guys to give away the store.

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G_j

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Thu Mar-11-10 11:40 AM
Response to Reply #1

2. yep

we pay them to screw us.

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dixiegrrrrl

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Thu Mar-11-10 11:59 AM
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4. So that makes "them"....uhh..I know there is word for it.

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dmr

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Thu Mar-11-10 01:37 PM
Response to Reply #1

6. Do you know if it's a given this will be under the Fed. Reserve?

I thought the prez and most Dem Senators (including on the Cmmte) wanted this to be a separate entity & were opposed of it being under the Fed.

I'm confused.

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dkf

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Thu Mar-11-10 11:42 AM
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3. Didn't I just get an ap newflash that Dodd is going to write this himself without Corker?

Does that mean protection for payday lenders is gone?

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dmr

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Thu Mar-11-10 01:32 PM
Response to Reply #3

5. Corker doesn't want it. They contribute to his coffers.

I wonder about Dodd and Corker working on this together. If they are doing a tit for tat without anyone really knowing what the tits and tats are.

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Echo In Light

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Thu Mar-11-10 01:44 PM
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7. Of course

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LeftHander

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Thu Mar-11-10 02:32 PM
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8. Usury was against the law...until the Republicans made it legal...

Edited on Thu Mar-11-10 02:33 PM by LeftHander

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ljm2002

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Thu Mar-11-10 04:59 PM
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9. And they wonder why we hate politicians...

...I mean, WTF???

If you were going to create a Consumer Financial Protection Agency, wouldn't the first thing to look at be the most vulnerable consumers? As in, people who are desperate, lower income, perhaps with less schooling, and availing themselves of loans with the absolute highest interest rates around.

Nope, our illustrious "leaders" will end up with a bill that protects those who make >$100K and leave everyone else to their own devices.

Okay, I made that part up. But still.

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