Blogs Against Kleptocracy – Government Sanctioned Usury

So-called ‘Payday Loans’ are one of the most pernicious, most destructive forms of lending.  Pushed by an industry that preys on low and moderate income Americans, these loans can often be found with rates equivalent to over 400% annually.  And just in case you’re wondering how that stacks up to common usury law in the United States… Of the states that have a defined limit, the most generous is Colorado’s at a comparatively puny 45%.

Now, after dumping millions of dollars of contributions on key congressmen, the payday loan industry is about to get a gift in the form of competing bills drafted by Luis Gutierrez (D IL), the ranking Democrat on the House Financial Services Subcommittee and Joe Baca (D CA).  Gutierrez’ legislation will for the first time codify in federal law general limits on payday lending, although at an income crushing 391% APR.

Ironically the Payday industry opposes Gutierrez’ ‘bad-cop’ routine on the grounds that restrictions on suing and garnishing the wages of unlucky borrowers will ‘destroy’ their business.  So the industry is supporting Baca’s ‘good-cop’ attempt to take regulatory power away from the states.  In fact, Baca’s bill will not only supersede existing state limits on interest rates but will pave the way for payday lending in states where it’s not currently feasible.

In short, these two congressional ass-wipes are making it possible for a predatory industry to enrich themselves mightily during the the worst recession that most Americans have ever experienced—shining examples of the Corporate Kleptocracy in action.

<< Previous  Blogs Against Kleptocracy  Next >>

5 thoughts on “Blogs Against Kleptocracy – Government Sanctioned Usury”

  1. Lew… Democrats? Or Republicrats? These two seem to be in that grey area in between.

    Liberality… Don’t know much about Guitierrez, but Baca is a swine, and you’re right…a call won’t do much good.

  2. Research shows payday advance customers to be middle-income, educated, working families. More than half earning between $25,000 and $50,000 annually. 58 percent having attended college, and one in five having a bachelor’s degree.

    The only way to reach the much-hyped triple digit APR is to take out one advance and continue to renew the same advance every two weeks for an entire year. State laws and industry best practices do not allow this to happen

  3. Jeff… Welcome to Ragebot.

    Whether the rate is 50% or 500% percent, the point of a ‘Blog Against Kleptocracy’ post is to demonstrate the close relationship of our government–our leaders–to the industries that are doing their level best to fleece us.

Leave a Reply

Your email address will not be published. Required fields are marked *