Debbie Wasserman Schultz attacked for bank donations and position on payday loan bill

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8. Reverse Robin Hood: Six Billion Dollar Businesses Preying on Poor People

Last edited Thu Mar 31, 2016, 08:40 AM - Edit history (1)

by Bill Quigley / March 7th, 2016

Many see families in poverty and seek to help. Others see families in poverty and see opportunities for profit.

Here are six examples of billion dollar industries which are built on separating poor people, especially people of color, from their money, the reverse Robin Hood.

Check Cashing Businesses

Check cashing businesses. Cash a $100 check? At Walmart that will be $3. At TD bank non-customers pay $5 to cash a check from their bank.

Nearly 10 million households containing 25 million people do not have any bank account according to the FDIC. Most because they did not have enough money to keep a minimum balance in their account.

Check cashing businesses are part of a $100 billion industry of more than 6,500 check cashing businesses in the US, many which also provide money orders, utility bill payments and the like, according to testimony provided to Congress by the industry.

~snip~

Payday Loans

Payday loans are used by people over 15 million times a year and can lead to deep debt problems and usually involve incredible percentages of up to 391 percent according to the Consumer Financial Protection Bureau. Pew Charitable Trusts reported payday loans are a $7 billion dollar a year industry. The Federal Trade Commission won a $300 million case against two payday lenders who were deceiving borrowers, who, for example, took out a $300 loan thinking it could be repaid for $390 when, in fact, the lender was charging $975 to pay off the $300 loan. The US Department of Justice indicted former race car driver Scott Tucker on criminal charges for operating a $2 billion nationwide payday loan operation which routinely charged interest on loans for over 4.5 million people of 400 to 700% per year. The nation’s largest pay day loan company, Advance America, charged nearly 140,000 people in North Carolina annual percentage rates exceeding 450 percent until it was stopped by the state.

Debt collection

...... These are not just small companies but big names like Citigroup, Capital One, JPMorgan Chase, Bank of America and Wells Fargo; in fact, the Alliance for Just Society reported the big companies in debt collections have made nearly $100 million in contributions to federal candidates and parties since 2001 and another $280 million on federal lobbyists.

Citibank was sued twice by the federal CFPB over falsified documents and providing inaccurate information in debt collections and agreed to settle the case.

Conclusion

These businesses target families with incomes below $35,000 and people of color are three times more likely to receive abusive loans than whites. People with blemished credit are often passed over when seeking jobs.

There is some good news. Democrats created and passed into law the Consumer Financial Protection Bureau which is now beginning to gain some traction in monitoring and regulating these predatory practices. Bad news is that Republicans like Ted Cruz are trying to kill it and some Democrats are trying to hobble it. There are also good groups like the Center for Responsible Lending which provide excellent information on the abuses. But in the meantime making money off poor people remains a booming business.

Full article: http://dissidentvoice.org/2016/03/reverse-robin-hood-six-billion-dollar-businesses-preying-on-poor-people/

http://www.huffingtonpost.com/entry/debbie-wasserman-schultz-paylenders-cfpb_us_56d4ce38e4b03260bf77e8fc