Kristin Gillibrand aims to slay the seedy payday loan industry

[bad_teammate 13328]

Gillibrand aims to 'wipe out' payday lenders with postal banking bill

Quote

Sen. Kirsten Gillibrand, D-N.Y., on Wednesday unveiled a bill that would empower the U.S. Postal Service to take deposits and make loans, a move she said would "wipe out" predatory lending and improve consumers' access to financial services.

The bill, dubbed the Postal Banking Act, would place a retail bank branch in each of the Post Office’s 30,000 locations — branches that would provide “low-cost, basic financial services to all Americans,” according to a press release.

In a tweet, Gillibrand said that the legislation would “wipe out the predatory practices of the payday loan industry overnight by providing an accessible and low-cost alternative.

“The federal government has backed financial institutions directly and indirectly for decades with FDIC insurance, FHA backing, and bailouts,” Gillibrand tweeted. “But those 'for-profit' banks have left too many behind. It's time to close the gap — and this time, no one will get rich on the taxpayers' dime. This is a simple solution to a problem facing every state in this country.”

Sounds awesome as a way to combat payday lenders and banking deserts.

Utilizing available public infrastructure to provide important public services? Who'da thunk!?

[David Dennison 19135]

This is a no-brainer. It's shocking how many people in this country are prevented from opening a bank account.

[Bozo_Casanova 26690]

4 minutes ago, bad_teammate said:

Gillibrand aims to 'wipe out' payday lenders with postal banking bill

Sounds awesome as a way to combat payday lenders and banking deserts.

Utilizing available public infrastructure to provide important public services? Who'da thunk!?

Actually this would be responsive to the market, and not just at the low-end or among underbanked populations. There's a significant and growing body of industry research showing a strong consumer desire to access consumer financial services through national brand pharmacies, wireless providers, "The Four" (Amazon, Facebook, Google, Apple), Walmart, and the USPS. 

Edited April 25, 2018 by Bozo_Casanova

[Judge Roybeanbag 11830]

It has as much chance of passing as I do of fucking Taylor Swift.

[David Dennison 19135]

1 minute ago, Judge Roybeanbag said:

It has as much chance of passing as I do of fucking Taylor Swift.

True, but Democrats should run on it. It needs to happen eventually. 

[Judge Roybeanbag 11830]

1 minute ago, David Dennison said:

True, but Democrats should run on it. It needs to happen eventually. 

Agreed.

[Hugo Stiglitz 23367]

This is Elizabeth Warren’s turf.  

Nice going by Gillibrand to jump in on this cause.

[SDG 3319]

“Basic financial services” can mean a lot of things. Are we talking check cashing or wire type services?  If so that’s good; they already provide things like money orders so offering other low cost/low risk services seems logical.  Now, making loans is a whole anther ball of wax.  Some people are under banked for a reason.  The usps shouldn’t step foot into one of the riskiest businesses out there because tax payers will be left holding the bag when it inevitably fails.  

[TwiceHorn 31703]

2 minutes ago, SDG said:

“Basic financial services” can mean a lot of things. Are we talking check cashing or wire type services?  If so that’s good; they already provide things like money orders so offering other low cost/low risk services seems logical.  Now, making loans is a whole anther ball of wax.  Some people are under banked for a reason.  The usps shouldn’t step foot into one of the riskiest businesses out there because tax payers will be left holding the bag when it inevitably fails.  

Yeah the lending part bothers me.  Maybe "microlending" or something, but yeesh.

[RayDog 682]

In the Philippines people mostly borrow from relatives and friends (and foreigners who are suckers). Someone goes in and hands over the money with the name of the recipient and a 5% processing fee. They get a code that the other person can use to retrieve it. The person can pick it up anywhere by showing id and the code.

It is like Westen Union but far more efficient and popular. I think it is a much better approach to microlending. The companies could probably still make a profit with a 2% fee.

 

[Sawbonz 27793]

Unsecured loans from the govt? What could possibly go wrong?

[pyrohornIII 4842]

Yeah, try sending some money to someone who doesn't have a bank account.   It's murder.   Green dot sucks, but its the cheapest.  But you have to go in every time to get a new card.  Western Union is convenient, but its right at 13% or higher surcharge.   Paypal will put "suspicious" on any transaction they choose then then hold it for weeks...that's after charging you 7 bucks for the transfer.  It truly is a rigged game against the poors. 

And more companies are going with direct deposit.  With no account, it's a hassle to get a paper check.  

On the other hand, there is a lot of stuff going on with cash right now.  Because people who don't have bank accounts don't have cards to use at gas pumps, etc.  So in the past few years more people paying with cash.  Cash is often unreported, thus the government is losing out on the income tax end? 

 

 

 

Edited April 26, 2018 by pyrohornIII
added stuff

[David Dennison 19135]

This isn't for the post office to make sizable personal loans. It's so people can have bank accounts.

Edited April 26, 2018 by David Dennison

[bad_teammate 13328]

On 4/25/2018 at 8:42 PM, Sawbonz said:

Unsecured loans from the govt? What could possibly go wrong?

Not much. These people aren't playing around with billions of dollars in securities and credit swaps. You're talking about someone getting a quick $200 to cover electricity and water a few times a year.

[Viper 12159]

5 minutes ago, bad_teammate said:

Not much. These people aren't playing around with billions of dollars in securities and credit swaps. You're talking about someone getting a quick $200 to cover electricity and water a few times a year.

If it were as clean and simple as that then payday loans wouldn't be an issue.

[bad_teammate 13328]

Just now, Viper said:

If it were as clean and simple as that then payday loans wouldn't be an issue.

Then what are the issues?

[Brothahorn 10088]

4 hours ago, bad_teammate said:

Then what are the issues?

Taking on the risk of not being paid back. There is a reason why so many high-risk borrowers go to payday lenders. Mostly it's because they have burned all their other options, including friends and family.

[Chooky 13322]

To get the bill on the floor Gillibrand will have to let the Senate pay her utilities bill for the month of April.  If the bill doesn't pass they get to take her house, her car and fine her a 400% increase of whatever her utilities were.  It's risky.  

[SizzleChest 8295]

 

[bad_teammate 13328]

2 hours ago, Brothahorn said:

Taking on the risk of not being paid back. There is a reason why so many high-risk borrowers go to payday lenders. Mostly it's because they have burned all their other options, including friends and family.

He was talking about other issues, I think, which is why I asked.

Given the business our government gets into with corporate interests, on the level of tens and hundreds of billions of dollars essentially set on fire, do you really think that this USPS-banking scheme is going to be giving out unsecured loans that would even brush up against that amount?

Having access to a non-predatory bank is not something friends and family can help you with. The reality is that our economy is forcing people into the credit and banking systems and we need to make sure we can make that accessible for everyone who isn't middle-class-plus. Poverty fucks people up, and every initiative we can take to smooth the path from poverty -> prosperity is one we should embrace as a public good.

People make mistakes. People make poor choices. People are born into disadvantageous situations. They aren't going to simply disappear because we scold and chastise them on the Internet. We have to figure out how to mitigate the society-wide damage of poverty unless we want to become an even bigger cautionary tale of wealth disparity. (God forbid we seek to become that shining beacon on a hill and positive example to the rest of the world.)

The Scarcity Trap: Why We Keep Digging When We're Stuck In A Hole

[SDG 3319]

I agree with your statements on banking but the government should stay out of lending, period.   The bottom line is it takes multiple “mistakes” before lenders won’t touch you.  People who use payday lenders have had multiple chances and they pay appropriately for their risk.  The reason fees are high are because a very large % will never be collected.  If someone truly needs help we have a rather large systems to help (AFDC, food stamps, HUD, others). 

 Ftw payday lenders aren’t banks and shouldn’t be used interchangeably. 

[David Dennison 19135]

20 minutes ago, SDG said:

I agree with your statements on banking but the government should stay out of lending, period.   The bottom line is it takes multiple “mistakes” before lenders won’t touch you.  People who use payday lenders have had multiple chances and they pay appropriately for their risk.  The reason fees are high are because a very large % will never be collected.  If someone truly needs help we have a rather large systems to help (AFDC, food stamps, HUD, others). 

 Ftw payday lenders aren’t banks and shouldn’t be used interchangeably. 

The government should stay out of lending? What planet do you live on?

[bad_teammate 13328]

22 minutes ago, SDG said:

I agree with your statements on banking but the government should stay out of lending, period.   The bottom line is it takes multiple “mistakes” before lenders won’t touch you.  People who use payday lenders have had multiple chances and they pay appropriately for their risk.  The reason fees are high are because a very large % will never be collected.  If someone truly needs help we have a rather large systems to help (AFDC, food stamps, HUD, others). 

 Ftw payday lenders aren’t banks and shouldn’t be used interchangeably. 

"appropriately" is not a word that actually fits there at all, because the conditions under which people suffer financially (and you have to concede that virtually everyone entering a payday loan facility is suffering to some degree) do not create any "appropriate" outcomes.

The majority of payday loans are given for recurring expenses. People take out payday loans to keep the lights on or the phone on or to stay in their apartment. These are, honestly, things we should essentially be providing to the poor anyway. The government takeover of the payday loan industry seems like the most capitalist solution possible to this problem. 

----

I think he meant that the government should stay out of lending to the poor.

Edited April 27, 2018 by bad_teammate

[SDG 3319]

6 minutes ago, David Dennison said:

The government should stay out of lending? What planet do you live on?

The planet where they shouldn’t  but do.  See housing crisis and  tuition increases (soon bursting bubble) brought to you by our government getting into the loan business.

Edited April 28, 2018 by SDG
Multitasking is hard.

[David Dennison 19135]

Just now, SDG said:

The planet where they don’t but should.  See housing crisis and  tuition increases (soon bursting bubble) brought to you by our government getting into the loan business.

And if they didn't a shit load of people would never be able to own a home or go to college.

[TwiceHorn 31703]

Actually, the gubmint guarantees a lot of consumer loans, but they don't make them.  There is a difference.

[SDG 3319]

2 minutes ago, David Dennison said:

And if they didn't a shit load of people would never be able to own a home or go to college.

There was way more financial aid before the government went balls deep in loans.  It’s better to get tuition you don’t have to pay back. And there are better home loan options, such as down payment assistance, then guaranteeing FHA loans.  Besides owning a home isn’t a right. 

[David Dennison 19135]

7 minutes ago, TwiceHorn said:

Actually, the gubmint guarantees a lot of consumer loans, but they don't make them.  There is a difference.

True, but many of those loans would never be made but for the guarantee of the federal government.

[SDG 3319]

14 minutes ago, bad_teammate said:

"appropriately" is not a word that actually fits there at all, because the conditions under which people suffer financially (and you have to concede that virtually everyone entering a payday loan facility is suffering to some degree) do not create any "appropriate" outcomes.

The majority of payday loans are given for recurring expenses. People take out payday loans to keep the lights on or the phone on or to stay in their apartment. These are, honestly, things we should essentially be providing to the poor anyway. The government takeover of the payday loan industry seems like the most capitalist solution possible to this problem. 

----

I think he meant that the government should stay out of lending to the poor.

No, the government should stay out of lending especially to uncredit worthy individuals.  You can be poor and have good credit...  my dad was a migrate worker who had no money, but always had good credit. Why? Because he used it well and only when needed. 

[bad_teammate 13328]

6 minutes ago, SDG said:

No, the government should stay out of lending especially to uncredit worthy individuals.  You can be poor and have good credit...  my dad was a migrate worker who had no money, but always had good credit. Why? Because he used it well and only when needed. 

OK, great, but all those people who aren't as wonderful and amazing as your dad... are they going to disappear?

[SDG 3319]

1 minute ago, bad_teammate said:

OK, great, but all those people who aren't as wonderful and amazing as your dad... are they going to disappear?

No, there are plenty of gov programs, I listed some of them for you.  Back to the draft for me.  

[Washpark 176]

Quote

Mulvaney Sides With Payday Lenders Asking Court to Block Restrictions
 

Payday lenders fought, and lost, a battle to block new federal rules curbing short-term loans that critics say can trap people in cycles of debt.

Now, with the restrictions scheduled to take effect next year, the lenders have moved their fight to the courtroom, and have gained a powerful ally: the Consumer Financial Protection Bureau, which wrote the rules the industry is seeking to overturn.

In a joint motion filed late last week in federal court in Austin, Tex., Mick Mulvaney, the bureau’s acting director, sided with two industry trade groups suing the agency. The bureau asked a judge to delay the rules until after the industry groups’ lawsuit is resolved, which may take years.

By then, the entire issue could be moot: Mr. Mulvaney has said he intends for the bureau to reconsider, and perhaps repeal, the rules. To do that, the agency has to follow a formal administrative process, which it has said it plans to begin by February.

Consumer groups that favor the new rules complained that the court filing appeared intended to delay the restrictions long enough for the bureau’s new leadership to kill them before they take effect.

“In order to reopen a rule, you have to go through the same process you did to create it,” said Linda Jun, a senior policy lawyer for Americans for Financial Reform. “You have to give notice and let the public say their piece. You don’t get to say, ‘I just don’t like it, so I’m going to do a legal end run around it.’”

The Community Financial Services Association of America, a trade group and one of the plaintiffs in the case, said it was pleased that the bureau planned to reconsider what it called an “arbitrary and capricious” rule.

“It makes no sense to force companies to comply or prepare to comply with a rule that may never take effect,” said Dennis Shaul, the group’s chief executive.

The other plaintiff is the Consumer Service Alliance of Texas.

The consumer bureau declined to comment on its court filing. Mr. Mulvaney, who took temporary command of the agency one month after the short-term-loan rules became final, has dropped several of the agency’s lawsuits against payday lenders and has taken a softer stance toward the industry than his predecessor did.

https://www.nytimes.com/2018/06/05/business/cfpb-payday-lenders-mulvaney.html

[TahoeHorn 107]

There is a long list of unwholesome products and services desired by people.  I, and many, are conflicted about whether to outlaw, regulate or leave alone these businesses.  On the long list are alcohol, recreational drugs, cigarettes, gambling, abortions, loan sharking, and prostitution.  Taking away, or severely restricting the offerings doesn't eliminate the demand.  I think the devil is in the details.  My gut reaction is to allow payday lending but eliminate egregious practices.  But to decide I'd like to get data on how various laws work in practice.

[Blotto 23752]

2 hours ago, TahoeHorn said:

There is a long list of unwholesome products and services desired by people.  I, and many, are conflicted about whether to outlaw, regulate or leave alone these businesses.  On the long list are alcohol, recreational drugs, cigarettes, gambling, abortions, loan sharking, and prostitution.  Taking away, or severely restricting the offerings doesn't eliminate the demand.  I think the devil is in the details.  My gut reaction is to allow payday lending but eliminate egregious practices.  But to decide I'd like to get data on how various laws work in practice.

And yet as soon as your beloved GOP gets in power, they immediately move to neuter the government agency tasked with eliminating predatory lending practices... 

Quote

On Wednesday, the Consumer Financial Protection Bureau dismissed all 25 members of its Consumer Advisory Board, a group of experts that the head of the CFPB—currently Mick Mulvaney, a longtime foe of the bureau—is required by law to consult with in-person twice a year.

The move is the latest in a series of dramatic, sweeping changes introduced by Mulvaney, who has relaxed regulation of predatory payday lenders, stripped enforcement powers from agents tasked with weeding out lending discrimination, and even gone so far as to change the agency’s name to the Bureau of Consumer Financial Protection. Mulvaney has long crusaded against the agency, famously calling it a “sick, sad” joke, and once co-sponsoring legislation as a congressman aimed at shutting down the bureau entirely.

 

[Hugo Stiglitz 23367]