It’s fair to say that calling out conservative leaders in Congress for talking out of both sides of their mouths is no particular challenge these days. The list of issues on which our lawmakers pay lip service to their supposed deep concern for the needs of “ordinary Americans” even as they’re lining up to do the bidding of corporate predators with slick lobbyists and big PAC’s is as long as your arm.
Still, the breathtaking hypocrisy embodied in a couple of high profile stances taken by politicians of the Right in recent days comes close to hitting a new low.
Think about it: According to an almost unanimous chorus of conservative leaders, it’s impossible for there to be consideration of a new Supreme Court justice nominee in 2016 because it’s too close to the 2016 election.
“In this election year, the American people will have an opportunity to have their say in the future direction of our country,’ Burr said in a statement released by his office Monday. “For this reason, I believe the vacancy left open by Justice Antonin Scalia should not be filled until there is a new president.”
But of course, as the N&R went on to observe, Burr’s stance is preposterous. By such “logic,” Burr himself should refrain from taking any further actions this year given that he is up for re-election. Shouldn’t North Carolina voters have their say before the person filling Burr’s Senate seat takes any further action on any number of vital issues affecting the future of the country?
And, of course, if the “less-than-a-year-to-the-election” rule is going to be applied to Senator Burr, it obviously makes sense for his colleagues in the House as well – all of whose seats are up for election in just nine months.
Congressional committee plowing ahead
We know you’ll be shocked to learn, however, that congressional Republicans are plowing shamelessly and hypocritically along with all sorts of dreadful legislation and other actions that would do nothing to serve the interests of average Americans. A classic case in point is last week’s kangaroo session of the House Financial Services Committee – a meeting that even featured its own special and disingenuous title — “The CFPB’s Assault on Access to Credit and Trampling of State and Tribal Sovereignty.”
You see, “CFPB” stands for the Consumer Financial Protection Bureau — a federal agency championed by Elizabeth Warren and launched by the Obama administration a few years ago that has worked heroically in the face of fanatical opposition from the predatory lending industry to, you guessed it, protect vulnerable consumers from predatory lending. As you read this, the CFPB is actually getting close to issuing a new set of rules that would clamp down on the bottom feeding sharks who market so-called “payday loans” and “car title loans” to low income people.
As a brief memory refresher, “payday loans” involve relatively small ($300 to $500) short term (ten day to two week) loans that feature a sizable fee (e.g. $50) that works out to an astronomical annual interest rate. If taken out only once, they are an expensive but relatively harmless deal. Unfortunately, the business model for payday lenders involves convincing borrowers to repeatedly roll the loans over just short of their next payday (when the typical loan would come due). Over time, as borrowers take out six or 10 or 20 consecutive loans – as is a common practice – the cost of a $300 loans can quickly soar well in excess of the principal borrowed. Hence, the enormous profits the industry rakes in.
Car title loans are a close relative of the payday loan in which the borrower pledges the title to his or her car as security for a short term, high interest loan. As with payday loans, car title loans feature effective annual interest rates in the triple digits and are regularly rolled over or “flipped” by the lenders to extract even more cash.
This brings us back to the planned rules under development at CFPB. Both payday and car title loans are legal and subject to all kinds of abuse in a large number of states though, happily, they are both illegal in North Carolina and a few other states. The new rules – which are expected to be formally proposed this spring – are expected to restrict the loans significantly. Ideas under consideration include a requirement of a “cooling off” period between loans or a limitation on the number of loans lenders can make to individual borrowers so that they aren’t ensnared in what consumer advocates rightfully describe as a “debt trap.”
Not surprisingly, the players in this racket (“industry” is really too kind of a term) are doing their worst to stop or eviscerate the proposed rules for the states where the loans are currently legal. This includes lobbying Congress incessantly to weigh in. At last week’s hearing, “industry” lobbyists worked hand-in-glove with Republican committee members (North Carolina’s Patrick McHenry and Robert Pittenger are two of their champions) to push the payday and car title apologia.
This is from an article in American Banker:
Speaking at a House Financial Services subcommittee hearing on Thursday, several Republicans argued that the states were doing a good job in regulating such products.
“I find it offensive that you would say that people aren’t smart enough to make decisions for themselves,” said Rep. Mia Love, R-Utah. “So you have to go into states, you have to go into cities, you have to go into all these other places to say, ‘trust Washington, we know what’s best for you. … don’t worry, your states aren’t doing a great job. They don’t understand what your needs are, we understand more than anybody else.'”
This is classic predatory lender speak. Payday and car title loans are said to be all about “consumer choice” and efforts by regulators to limit the scams amount to nothing better than “officious paternalism.” Sadly, conservative and/or corrupt lawmakers, including some Democrats, are all too happy to regurgitate such talking points. Some have also advanced a bill that would make Florida’s absurdly weak regulatory scheme a national standard.
Where things stand
At present, the CFPB rules remain, encouragingly, on track. Despite repeated threats and efforts to undermine their efforts by Congress, agency leaders are sticking to their guns.
Interestingly and in a weird twist, consumer advocates in states like North Carolina where the loans are illegal are working hard to convince the agency not to inadvertently revive them by adopting standards that are too lax. The concern is that the agency could propose rules that would actually improve things in most states, but make them worse here by legalizing the loans or providing cover to state legislators looking to do the same
Thus far, consumer advocates remain optimistic that the CFPB will do the right thing by toughening laws in most states and allowing so-called “non-authorizing” states like North Carolina to retain their out and out bans. Click here to find out more about these efforts.
None of this, however, prevents congressional conservatives from continuing their attempts to undermine the CFPB rulemaking. Indeed, if recent actions are any indication, look for lawmakers to keep pushing for hearings and votes designed to promote payday and car title loans all throughout 2016.
It’s enough to make you think that the best thing that could happen would be for President Obama to do a “180” and join them in their efforts. That would surely halt further congressional action until a new president takes office in 2017.
After all, we wouldn’t want to do anything to stop the people from having their say in an election year. Right, Senator Burr?