According to data from OpenSecrets, members of Congress currently serving on the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee have collectively received more than $3.4 million from the industry. payday loans while in Congress. Of the 78 senators and representatives serving on the committees, only 11 received no contributions from payday lender members or affiliates.
Both committees are tasked with regulating the payday loan industry and are considering legislation to do so. the Fair Credit Act for Veterans and Consumerswhich would cap the interest rate on consumer credit extensions at 36%, was introduced to the Senate Banking Committee by Senator Jack Reed (D-RI) in July 2021, and reintroduced to the House Committee on Financial Services in November 2021 by Representatives Jesus Garcia (D-IL) and Glenn Grothman (R-WI).
As of February 19, 2021 states and the District of Columbia have legislation interest rate cap at 36%. Oversight organization Manager.US said the legislation would help tackle predatory lenders who “target communities of color” and benefit Black Americans, citing “nearly 190 consumer, civil rights and other public interest groups.” Several committee members who have taken large sums of money from the industry opposed an interest rate cap, according to Accountable.US.
Several members of Congress have received hundreds of thousands of dollars from the payday loan industry, including Sen. Richard Shelby (R-Al), Sen. Mike Crapo (R-ID) and Rep. Blaine Luetkemeyer (R-MI ). Luetkeymeyer has, so far, received $39,000 from PACs and individuals affiliated with the payday loan industry during the 2022 election cycle — more than any other sitting member of Congress. While many of the top recipients of payday loan industry contributions have each been in office for more than a decade, Senator Kyrsten Sinema (D-AZ), who served in the House from 2013 until her elected to the Senate in 2019 by a special, has received approximately $150,000 from the payday loan industry since taking office.
In addition to pouring money into political contributions, the payday loan industry spent $4.2 million on lobbying in 2021, the highest amount since 2017. In 2021, at least five companies and groups payday loan industry commercials hired lobbyists for services that included lobbying. to SJ Resolution 15 – a invoice to roll back a Trump-era rule that made it easier for nonbank lenders to issue loans through partnerships with domestic banks, according to documents filed under the Lobbying Disclosure Act.
In October 2020, the Office of the Comptroller of the Currency Posted a “genuine lender” rule, which allows non-bank lenders to avoid state interest rate caps through partnerships with lenders. The Congressional Review Act was passed by the Senate in May 2021, and the lodge in June 2021, reversing the true lender rule.
The Alliance of Online Lenders has hired lobbying firm Emergent Strategies for $120,000 for work in 2021 on the resolution and the SAFE Banking Act. The resolution was the only issue listed in lobbying documents detailing DC GROUP’s work for online credit firm Elevate Credit from April to June 2021. Elevate Credit paid the lobbying firm $120,000 to work on the resolution this quarter and $360,000 in total during 2021.
Opportunity Financial LLC paid the Madison Group $120,000 in 2020, including $60,000 in quarters that included lobbying on the “Resolution of the Congressional Review Act.” One of the firm’s lobbyists is Tiffany Harris, who worked in the office of Sen. Robert Melendez (DN.J.) as a legislative correspondent. Menendez, who sits on the Senate Banking Committee, has seen a number of former employees leave his office and to rejoin lobbying firms.
JLL Partners hired law firm Hogan Lovells and paid $220,000 in 2021 for the services of Ivan Zapien, a partner at the firm and former chief of staff to Menendez. Zapien only reported lobbying Congress to establish federal tariff caps in 2021.
Fintech firm Enova International Inc. paid Lavender consultants former House Financial Services Committee chief of staff Larry Lavender $200,000 in 2021 with $150,000 in quarters that included lobbying on SJ Res. 15 and 23 other numbers. Lavender was also paid to lobby the VCFCA.
INFiN, a financial services trade association, paid $180,000 to Crossroads Strategies LLC for lobbying on a variety of issues, including the VCFCA.
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