This week, a government watchdog filed an ethics complaint alleging that a dozen members of Congress had received campaign donations from predatory payday lenders immediately before or just after taking action to protect their interests.
The donations, first flagged in a report released last week by Allied Progress, a progressive advocacy group, appear to cross the fuzzy line between routine fundraising and a quid pro quo arrangement—what non-lawyers would see as something approaching outright bribery.
Anne Weismann, executive director of the Campaign for Accountability, which filed the complaint, told The Nation, “These members of Congress are advancing the interests of what can only be called a reprehensible industry. Its business model is to trap people into this endless cycle of debt, and it’s hard to imagine how they could see this as being in the best interests of their constituents.”
Allied Progress staff were reviewing contribution data for lawmakers who had taken at least $25,000 from the industry since the CFPB was established in 2011, and they noticed a pattern. A dozen lawmakers received campaign contributions just days before, days after or, in several cases, both before and after sponsoring or co-sponsoring three key pieces of legislation that would have hobbled regulators’ ability to rein in the industry—or signing onto letters to Attorney General Eric Holder and Federal Deposit Insurance Commission Chairman Martin Ginsburg that The New York Times described as an attempt to “intimidate the Justice Department and federal regulators into abandoning an important strategy designed to protect” consumers from predatory lending.
“It would be one thing if we had only found one instance,” says Karl Frisch, the executive director of Allied Progress, “but when you see it with a dozen members of Congress, and it totals hundreds of thousands of dollars, then I don’t think that’s a coincidence.”
The Campaign for Accountability’s complaint calls for an investigation into whether these members violated House ethics rules or criminal laws against influence-peddling.
Payday lenders have been locked in a pitched battle with the Consumer Financial Protection Bureau (CFPB), the brainchild of Senator Elizabeth Warren, since its creation.
CFPB set its sites on payday lenders early on. Six months after it began operations, the fledgling agency’s first field hearings looked into the industry’s business practices, noting that for a typical payday loan, borrowers pay interest and fees that equal an Annual Percentage Rate “ranging from 391 percent to 521 percent.”