CREW Finds Payday Lending Industry Still Paying Up
Washington, D.C. –Today, as millions of Americans receive paychecks, they remain vulnerable to the abusive practices of payday lenders. New research released by Citizens for Responsibility and Ethics in Washington (CREW) shows the industry has continued to ramp up spending on lobbying and campaign contributions to prevent federal regulation of payday loans. CREW found spending surged as Congress stepped up financial regulatory reform efforts as it worked to pass Dodd-Frank last year. Read CREW’s report, Payday Lenders Pay More, here.
“Once again, we see that money talks in Washington,” said CREW Executive Director Melanie Sloan. “As usual, money paid to lobbyists was well spent, but working Americans were left out in the cold.”
This is the second time CREW has highlighted the lobbying and campaign funding practices of the payday loan industry. (Read CREW’s original 2009 report, Payday Lenders Pay Up here).
In the new report, CREW reveals that the payday loan industry more than doubled its lobbying expenditures between the 110th and 111th Congresses. This spending paid off as the industry was able to kill legislative proposals to cap payday loan interest rates and limit the number of times borrowers could take out such loans. The one bright note: the newly created Consumer Financial Protection Bureau will have jurisdiction to regulate payday lenders. As a result, an industry trade association, Financial Service Centers of America, announced it would move to Washington and make the new bureau “a primary area of focus.”
At the same time, industry campaign donations jumped 80% between the 2006 and 2010 midterm election cycles. In the 2010 cycle, former Rep. Kendrick Meek (D-FL) received the most contributions, taking in more than $50,000.
“This is just one sector, focused on a small sliver of our economy,” said Ms. Sloan, “but the payday loan industry isn’t alone in flooding our political system with cash, especially in the wake of the disastrous Citizens United decision. Unfortunately, real reform of our system would require lawmakers to bite the hand that feeds them. I won’t hold my breath.”
Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit legal watchdog group dedicated to holding public officials accountable for their actions. For more information, please visit www.citizensforethics.org or contact Jordan Libowitz at 202.408.5565 or email@example.com.