Payday Lenders Get Their Way in Financial Reform
Payday lenders won't be limited in their shenanigans
The legislation that now appears destined for President Obama's desk won't include an amendment that would have limited the number of high-interest loans payday lenders could make to cash-strapped consumers.
The industry had mounted an aggressive "grass-roots" effort to sway lawmakers by having customers voice opposition to a Consumer Financial Protection Agency and basically tell politicians to leave payday lenders alone.
The companies said they were just trying to protect people's ability to get credit. A more revealing perspective can be found in confidential e-mails and documents sent to workers at Advance America, the country's largest payday lender.
"After a customer repays their loan, the customer then asks for a new loan," wrote Dan Harnum, a divisional director of operations for the company in Michigan.
"TELL YOUR CUSTOMER THAT YOU CAN'T LOAN TO THEM BECAUSE THE GOVERNMENT HAS PUT US OUT OF BUSINESS," he instructed subordinates. "That will get their attention. Then ask them to write letters or call their senator/congressman."