How can you claim to support working people while protecting
payday loan predators?
By Phil Mattera for the Dirt Diggers Digest
Among the various roles played by
Donald Trump during his State of the Union address was that of class warrior.
He described a divide between
“wealthy politicians and donors” living in gated communities while supposedly
pushing for open borders and “working class Americans” who are “left to pay the
price for illegal immigration—reduced jobs, lower wages, overburdened schools,
hospitals that are so crowded you can’t get in, increased crime, and a depleted
social safety net.”
Trump’s efforts to stir up worker
resentment focus almost exclusively on situations in which foreigners can be
depicted as the real culprits.
He has no difficulty demonizing
undocumented immigrants or the Chinese government, yet he rarely has any
critical words for the traditional targets of populist anger: the super-wealthy
and powerful corporations.
On the contrary, those interests
have enjoyed a privileged place during the Trump era, receiving lavish benefits
in the form of tax breaks and regulatory rollbacks.
The latest example of the latter
came less than 24 hours after Trump concluded his remarks in the House chamber.
His Consumer Financial Protection Bureau announced plans to gut restrictions on
payday lenders that were developed during the Obama Administration and were
scheduled to take effect later this year.
The new rules were designed to put the responsibility on lenders to make sure their customers could afford the loans they were being offered.
This was seen as a necessary
safeguard in an industry notorious for charging astronomical interest rates to
vulnerable customers who frequently ended up with massive debts after rolling
over a series of short-term loans.
Prior to being neutered by the Trump
Administration, the CFPB conducted a series of enforcement actions against
payday lenders for egregious practices.
For example, in 2014 the
bureau brought a $10 million action against
ACE Cash Express, alleging that the company “used illegal debt collection
tactics – including harassment and false threats of lawsuits or criminal
prosecution – to pressure overdue borrowers into taking out additional loans
they could not afford.”
Payday lending has effectively been
outlawed in about 20 states, but the Obama-era rules would have made a big
difference in the rest of the country where the disreputable business is still
allowed to function with annual interest rates of 300 percent or more. It will
come as no surprise that many of the latter states are ones in which Trump
enjoys high levels of popularity.
I can’t help but wonder what working
class Trump supporters will think of this policy.
Coal miners cannot be completely
faulted for believing that Trump’s moves to dismantle power-plant emission
controls may help them get work, but will struggling low-income families be
cheered to learn that the administration is making it easier for payday lenders
to exploit them rather than following the lead of the states that put a lid on
usury?
Or, to put it more broadly, how long
will Trump be able to pretend to be a working-class populist while pursuing the
worst kind of plutocratic policies?