DNC Chair Debt Trap Debbie Exposed in Ad: ‘Payday Lending in Necessary’

Susanne.Posel-Headline.News.Official- debbie.wasserman.schultz.debt.trap.payday.loans_occupycorporatismSusanne Posel ,Chief Editor Occupy Corporatism | Media Spokesperson, HEALTH MAX Group

 

The non-governmental organization Allied Progress (AP) has paid for television adverts that highlight the relationship between Congresswoman Debbie Wasserman Schultz and predatory payday loan lenders.

Spending an estimated $100,000 on these ads, AP has placed them on cable stations across southern Florida, where Schultz is a representative of the people, as well as a big supporter of payday loan sharks.

Schultz is closer still with Hillary Clinton, having worked on her 2008 campaign for the democratic nomination. Now the congresswoman is fighting to keep federal regulators out of the payday lending business which disproportionately targets low-income Americans.

One of the bills Schultz wants to make a thing is HR 4018 which would gut current regulation on payday loan operators while tying back the hands of the Consumer Financial Protection Bureau (CFPB) when it comes to reigning in the destructive industry.

In addition to Schultz, Republicans who have received campaign contributions from the payday loan industry have fought to keep the CFPB from adopting new regulatory rules that protect Americans.

Schultz bill seeks to impose an extension on the 2 year waiting period on the CFPB’s new rules, and implementation, in order to prevent states from enacting regulatory laws in the meantime.

A spokesperson for the Florida Alliance for Consumer Protection (FACP) explained that this proposal is compromised because it’s “language [was] influenced by industry partners”. It establishes “well-disguised loopholes” that allow the payday industry to continue taking advantage of low-income customers.

The payday loan industry is also known as shadow banking and it is a system that was created to avoid a run on the banks, according to Federal Reserve Governor Jeremy Stein at a meeting for the 2014 American Economic Association (AEA) conference.

Stein explained how the shadow banking system (SBS) was integral to the stock market crash in 2007 that cost the US a stable economy.

The central banker said: “Shadow banking money is much more run prone than bank money. A stable deposit franchise gives a bank the ability to ride out transitory valuation changes of the sort that might come from noise-trader shocks or fire sales, without being forced to liquidate assets at temporarily depressed prices.”

While the “banks have government insurance for the deposits they hold and are relatively well capitalized compared to other financial institutions thanks to the regulation that comes along with that insurance. It’s other financial institutions, generally called shadow banks that are much more prone to runs.”

Shadow banking is an unregulated alternative and comes in several forms, including:

• Advanced check cashing stores
• Crowd-funding websites
• Money-market funds
• Repurchase agreements

Stein said that “part of the reason for this instability is that non-bank financial institutions often give investors the option to seize collateral in a transaction at a moment’s notice.”

The CFPB have been very vocal Bureau about why the shadow banking industry has enjoyed unsupervised functionality. The agency estimates that the $46 billion payday loan or cash advance industry has no oversight, refuses to give full disclosures of interest and fees involved, and takes an annual percentage of an excess of 300% against borrowers.

For example, shadow banking refers to a loan of $500 or less wherein the borrower “provides a personal check dated on their next payday for the full balance or give the lender permission to debit their bank accounts. The total includes charges often ranging from $15 to $30 per $100 borrowed. Interest-only payments, sometimes referred to as rollovers, are common.”

Because of this and for other reasons, the CFPB has suggested regulating shadow banking because of their dubious practices and products.

The Consumer Federation of America (CFA) counts 32 states in the US that “permit payday loans at triple-digit interest rates, or with no rate cap at all.”

Shockingly 80% of payday loans are rolled over within 14 days while an estimated 50% of these loans are “in a sequence at least 10 loans long.”

Source Article from http://feedproxy.google.com/~r/OccupyCorporatism/~3/_8JAp89kEfc/

You can leave a response, or trackback from your own site.

Leave a Reply

Powered by WordPress | Designed by: Premium WordPress Themes | Thanks to Themes Gallery, Bromoney and Wordpress Themes