Thursday, March 11, 2010

Corker Looks Out For His Loan Shark Buddy

Who’s looking out for you? Not Sen. Bob Corker, who is charged with using his position on the Senate Banking Committee to protect his good buddy W. Allan Jones, founder of Check Into Cash, one of those usurious payday lending chains that suck financially strapped people in with false promises, then keep them in debt forever by charging outrageous fees and interest rates as high as 400%.

TPM reports:
Lately, Congress has been mulling how to structure a new Consumer Financial Protection Agency (CFPA), so as to avoid a repeat of the financial crisis. And reform advocates have argued that increased regulation of pay-day lenders is an essential piece of the puzzle. But after lobbying by an industry group that Jones helped establish, Sen. Bob Corker (R-TN) acted to thwart the new agency's ability to effectively monitor Jones's industry.


There, Corker reportedly has weakened the section of the major financial regulatory reform bill that deals with pay-day lenders. Thanks to Corker, who sits on the Senate Banking committee, the new CFPA will have to get permission from a body of regulators in order to enforce rules against payday lenders and other non-bank financial companies -- a step that consumer groups say will significantly hamstring the agency's ability to crack down on predatory lending practices.

Corker's intervention came after intense lobbying from the Community Financial Services Association (CFSA), a trade group of pay-day lenders created in 1999 by Jones and others in the industry. In the last three months of 2009, CFSA spent $500,000 lobbying Congress on the financial regulatory reform and other issues affecting regulation of the pay-day loan industry, according to disclosure records examined by TPMmuckraker. (One of the top Washington lobbyists hired by CFSA, Wright Andrews of Butera & Andrews, was also the prime lobbyist for the sub-prime mortgage industry earlier this decade.)

Jones is a longtime backer of Corker -- as well as of several other lawmakers, from both parties, on the Banking committee. Since 2001, Jones, his relatives, and his employees, have contributed $31,000 to the campaigns of Corker, a former Chattanooga mayor, according to the New York Times.

For shame, Bob Corker. For shame.

These payday lenders are the worst sorts of vampires, preying on those in crisis situations who are least equipped to understand the pitfalls they face. Many of them, sadly, are our military personnel:

A study by Professors Chris Peterson of the University of Florida and Steven Graves of California State University, Northridge showed geographic evidence that payday lenders aggressively target military personnel. Payday lenders target service members because they are often young, financially inexperienced and strapped for cash, especially at the time of deployment. A December 2004 New York Times study revealed that 25 percent of military households have used payday lenders. The prevalence of high-cost borrowing among service members led the Department of Defense to list predatory lending as one of the top 10 threats to members of the military.

In 2006 the bipartisan Talent-Nelson Amendment was added to the Defense Appropriations Bill to protect military personnel from such predatory lenders. It was signed into law and went into effect in October 2007.

Now, how about the rest of us? Just once I'd like our Republican Senators to think about the people of this state who sent them to Washington, not the industries that send them campaign cash.