It's becoming difficult to cover the shifting ground in the Senate Banking Committee's financial regulatory reform negotiations, and perhaps the better part of wisdom will be simply waiting for the final product, since even many reformers despair of influencing the process until the Dodd-Corker negotiations are complete. But then you read something like this; you have to sit up and take note:
Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show.
Payday lenders are some of the foremost practitioners of pernicious consumer lending practices; a recent study by the New York City Department of Consumer Affairs found that just two low-income New York City neighborhoods paid $19 million a year in check-cashing fees alone, when sustainable credit could be found much more cheaply if the market wasn't flooded with usurious lenders. Failing to include payday lending in consumer financial protection legislation would be a major failure and continue to contribute to the cycle of debt that leaves our country's financial system weakened. Ironically, Corker was at a National Journal breakfast this morning, where he told attendees that "there will be no carve outs in consumer protection."
-- Tim Fernholz
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