Democratic Congressman who's giving payday loan companies legal 391% APR loans says he's powerless to resist their lobbying

You know, it is funny that no party affiliation was given for these two slugs. I wonder why?

http://luisgutierrez.house.gov/

(Democrat from Illinois). He could call up Obama, so why is he powerless to resist them?

cash baby cash.

http://projects.washingtonpost.com/congress/members/b001234/

Congressman Joe Baca (D-Rialto) who has voted with the Pelosi brigade 99.5% of the time is also powerless.....

You dems are such suckers to vote people in like this.

the committee chairman, Luiz Gutierrez (who also received contributions from the payday people) says the reason he's offering the industry this sweetheart deal after being on record as opposing this sort of thing is that their powerful lobbying has left him powerless to resist them: "...[T]hey're very powerful. Their influence should not be underestimated."

Translation: "They've got something on me that would kill my career if it became public knowledge."

I had to look it up as well, Space Guy, and there should be a party affiliation given. As I said below, I'd expect this stance from a Republican what with the party ideology of "Regulation is bad mmkay?" From a Democrat it just screams undue influence.

Kill

I saw this develop when the republicans were in control in the 90's. I used to do citizen lobbying and my first gig was in March of 94, right after the revolution. The republicans started with high ideals but got seduced by the big offices, and the lobbyists that had ignored them for decades started knocking on the doors with kind words and cash.

The democrats, who had been pushed out of their big fine offices (the majority party gets all the good office space) were incensed and went to war that finally got them the majority back in 06.

For the republicans it took them about four years to become corrupted by this influence, it took the dems less than half this time as they are bound and determined not to lose their big offices again and know what to do to keep them, which is what lost them for the pubs before, and should help to cast the die for the dems to lose the majority.

This is the only check that we as citizens have on the system.

Kill

Good for you for changing the title. We have to hold these idiots accountable, no matter the party.

If he is powerless than he should be remove from office, how much money are they putting in his hands to make him powerless.

Luiz Gutierrez is plain stupid for even making that statement, but is show me what type of people we have elected to office over the years. I am not sure if they are the idiots or we are for electing. Isn't he the one who is going after Joe in Arizona for arresting illegal, but Joe does his job for he is not powerless.

Send this coward to gitmo to be re-educated by some servicemen and women who've been stuck with these outrageous loans.

Just an FYI , the recent revisions to the SCRA and other laws actually restrict the APR of payday loans for servicemembers to 23 % APR. Hence why many organizations will now not lend to servicemembers.

Well..there goes his chances for re-election! Unfortunately, this isn't a issue about political stances, some Republicans are guilty of this kind of pandering as well.

The PayDay loan industry has been flying under the national radar for some time and has been largely gone unchecked. It needs to stop NOW!

As for Mr. Guiterrez's statement he just suffers from the Classic case of the dumba$$ syndrome.

They used to call it loansharking.

http://luisgutierrez.house.gov/PRArticle.aspx?NewsID=1373

Seems there is a big misunderstanding. The context of this statement is reference to lobbyists working to overturn state regulations on lending. His bill is to move them under one cap for all states which is much lower than stated.

As we can see from this chart that separates the states into three classes, those that have banned payday lending, those that cap interest rates for payday loans at 15 percent (or 391 percent APR) and those that either have no cap at all or have a cap in place that exceeds 391 percent. The goal of my bill is to move all 23 of the states in the far right column, over to the middle column. Then the consumer groups will have a realistic opportunity to work their magic and move as many states as possible over to the far left column. By the way, that column on the far right represents almost 113 million Americans that would be helped by my bill.

The current state of affairs for these consumers is unacceptable, and Congress would be derelict in its duties if we allowed them to remain unprotected from abusive and predatory lending.

H.R. 1214, the Payday Loan Reform Act of 2009, creates significant protections from abusive payday practices by preventing rollovers and freeing consumers from the debt trap by mandating a cost-free 90 day repayment plan. The bill lowers the effective APR of a payday loan to 48 percent, or 15 cents for every dollar loaned. This is a rate that is lower than 23 current state rate caps, including California, Colorado, New Hampshire and even my home state of Illinois. My legislation would also prohibit unfair mandatory arbitration clauses, increase disclosures and honor all existing stronger state protections by creating a federal floor on which stronger laws can then be built.

His bill actually lowers the 391% to 48%

Boing twisted this.

Now there is one thing in there congress needs to approach and that is arbitrary arbitration clauses. When you sign for credit they make you agree to arbitration with an arbitrator who is friendly to their company! Nice for them and deadly for you if you have a problem.

April fool to the trolls LOL

Change we can believe in.

I suggest you read:

http://www.illinoisassetbuilding.org/policy-iabg-illinois/oppose-congressman-gutierrezs-payday-loan-reform-act-of-2009/

Before you believe the congressman's spin.

This is corruption he admitted it and should be sent packing. The banks may have money but he has the vote. They can give him money if they want but that does not mean he has to vote in their favor. If he is admitting that his voting for money then it is bribery and he should be prosecuted.

By the way last year here in Tennessee we had several government officials sent to jail for the same thing bribery for votes.

In Oregon we passed laws that restricted interest and put the payday lenders out of business. Consumer protection should be a high priority for both Democrats and Republicans and I will cut the Democrats no slack for this. Their is NO excuse for either party to waffle or claim "too powerful to resist." Comments like that let alone actions are in my view treasonous and undermine the faith in our Democracy. Thanks Killfile for seeding this article.

Used to work at one of these places:

What are they gonna do, break his kneecaps?

Yes.

They used to call it loansharking.

They are loan sharks. We could only make loans of up to $245 (California limit) which, two weeks later, they pay back as $300. If you didn't pay, our job was to embarass you into paying us back. To go to your place of business, or home, or call your family and friends and let them know that we needed to speak with you, and make it very clear that "payday advance" was in the name of the company.

My boss was an Italian who very much wanted to be in the mafia, and did far too much cocaine. I quit when he got mad because our label maker ran out of tape and, rather than shut down the store and go to Staples to buy more, I began hand-writing them. He exploded and threw a stapler at my head when he saw my handwriting on the folders we kept on customers.

The places, and the people that run them, are wack-job central and are super criminal. It is illegal for us to give a new loan until the previous one is repayed, but policy at every one of them is to do it anyway. People would come in to get a loan to supplement their social security. Then, for the next six months, they'd have to take out another loan every two weeks. By the time they finally stop paying it (no one ever seems to actually pay them off), they've paid hundreds, or thousands, of dollars on their $250 loan.

My immediate supervisor (who I called the under-don) would occassionally call me to let me know that the lady upstairs (in the crappy apartment above the business in downtown L.A.) would be coming in to get a loan, but I shouldn't ask her to pay back her previous one. Why? Because she was selling meth to the under-don.

Down with them. Boo.

This industry is the epitome of the decay or our soceity. What's jilarious is that the politicians make rules, and these guy always break them. They are nothing more than loan sharks who are using our debt based bank loving social system to take advantage of people. Frankly I prefer mobsters to these scum who pretend to be honest. They are on the same level as pimps and drug dealers, and anyopne who takes money from them, approves any legal way for them to operate is on the same level.

Ok after I finished laughing at you guys I went and got the language of the bill. It limits paybacks to a charge of 15%. This is for a payday to payday loan and it cannot be rolled over It also has a provision contained therein that gives the consumer the right if they so choose to pay back the loan in 6 monthly installments without further interest. here is the text.

‘(d) Additional Protections for Consumers- It shall be unlawful for a payday lender to--

‘(1) require a consumer to pay interest and fees that, combined, total more than 15 cents for every dollar loaned in connection with a payday loan;

‘(2) threaten or seek to have the consumer prosecuted in criminal court to collect the loan;

‘(3) take or attempt to take an interest in any of the consumer’s personal property to secure the loan;

‘(4) file or initiate a legal proceeding of any kind, including a lawsuit or arbitration, against a consumer to collect on a loan that is the subject of an extended repayment plan, or construe the loan to be in default unless the consumer has failed to repay the loan as agreed under the terms of the repayment plan;

‘(5) take any power of attorney;

‘(6) include in the loan documents--

‘(A) a confession of judgment clause;

‘(B) a waiver of the right to a jury trial, if applicable, in any action brought by or against a consumer, unless the waiver is included in an arbitration clause allowed by subparagraph (C) of this paragraph; and

‘(C) a mandatory arbitration clause that is oppressive, unfair, unconscionable, or substantially in derogation of the rights of consumers;

‘(7) make a payday loan to a consumer who has an outstanding loan obligation to the creditor under an extended repayment plan, or for at least 13 days until after the outstanding loan obligation to the creditor under any such repayment plan is paid in full;

‘(8) knowingly accept payment in whole or in part for any obligation under an extended repayment plan based on funds obtained from another payday loan;

‘(9) enter into any agreement with a consumer pursuant to which the consumer seeks or purports to waive the consumer’s rights under this section or any claim or defense arising out of the loan contract;

‘(10) charge or attempt to collect, attorney’s fees, court costs, or arbitration costs incurred in connection with the collection of a payday loan;

‘(11) rollover a payday loan;

‘(12) make more than 1 payday loan at the same time to a consumer;

‘(13) fail to give the consumer, after each payment by the consumer, a signed, dated, receipt showing the amount paid and the balance due on the loan; and

‘(14) sell any insurance of any kind in connection with the making or collecting of a payday loan.

‘(e) Rescission- A consumer may cancel future payment obligations on a payday loan, without cost or finance charges by informing the creditor in writing, no later than the end of the 2nd business day following the day on which the payday loan agreement was executed, that the consumer wants to rescind the loan and by returning the cash amount of the principal of the loan to the creditor.

The 391% is a false figure as the bill prohibits them from doing what makes them the most money and that is rollovers. A rollover is when you cannot pay the loan on time but choose to just pay the interest which is loan sharking. This bill goes a long way in stopping the many different states that still permit these things and where the mentioned lobbyists are most successful.

I have no idea who this congressman is but the bill at present claims to have 28 cosponsers. If this guy caved he caved in on the lenders not consumers.

Forgot to include the link.

http://www.govtrack.us/congress/billtext.xpd?bill=h111-1214

Full text can be seen there.

Now I saw another comment on objection to the bill that turned out to be a web site for a lenders lobbying group.

The congressmans bill moves all the states that have a higher rate than 15% into the 15% rate, There are states that go higher than 15% . My state just passed a law capping it at 25%. The sensationalism on the 391% is an annual percetage rate. You pay 15 bucks for 1-2 weeks of use which is 15 buck per hundred. My opinion they should ban this kind of lending all together. This type of lending just preys on the people who can least afford to pay these high rates and is unfair.

People must not read these storys completly. people are always trying to make somthing out pf nothing.

These payday loans have been around for a long time.

This proposed change only effects payday loans for military personnel. Back in 2006 payday loans was forced to give Military personnel a special deal. So while everyone else had to pay 391% military perrsonel only had to pay 36. Hey I thought the GOP was all for free trade and no government intervention so why did they force the company's to give military personnel special deals ??

All they are doing now is leveling the field so military personnel pay the same as everyone else.

After watching members of the military fall prey to exorbitant payday loans, Congress in 2006 capped the interest rates for military payday loans at 36%

The 391% is a false figure as the bill prohibits them from doing what makes them the most money and that is rollovers. A rollover is when you cannot pay the loan on time but choose to just pay the interest which is loan sharking. This bill goes a long way in stopping the many different states that still permit these things and where the mentioned lobbyists are most successful.

What you're talking about is already illegal, here in California. It is not, and never has, enforced. These places are just bad, and should all get shut down. It's practically impossible to enforce, by the way, unless you have a cop standing at every teller window at these places.

It's very easy to enforce. Have an undercover go in and make a loan. Serve a warrant, seize assets and throw everybody in jail. End of stinky business.

Blaze, thanks for the correction in my figure. I wasn't sure about 23 % . So I stand corrected.

The Navy and Marine Corps Relief Society is also implementing an interest free payday loan program of up to $500 with no questions asked to mitigate the damage caused by payday lenders. You pay in 5 $100 dollar allotments (allotments are taken out before taxes) and you can't take another loan until that one is paid off.

Considering that what normally happens after these servicemembers are taken advantage of by predatory lenders, which is that the NMCRS has to grant/lend them money anyways to help them even stay afloat , this is just a good common sense program. So good, I almost have trouble believing the military thought of it.

Payday Loan Companies = Legal loan sharks.

Except they just slash your credit rating* instead of your kneecaps....

*And any other material or psychic possession they can get their claws into.

These creeps got an issue on the ballot in my state to set the rate but they also had to accept another box that lowered the rate way low. They lost after spending a ton of money promoting it.

Whats really sad is that they use the tax funded legal system and the slimeball credit reporting system to abuse and exploit people - these operations should be illegal by Federal law and there should be a hard cap on interst rates ....

Go to his web site and read the bill issues. This is apparently a joke since he is fighting to kick the 391 in all states. You been had bad lad.

If I have been had, I am glad. Really would not like to think the things I was thinking. Now I don't. Thank you.

I'm for term limits, but they should be even. Limit the senate to two 6 year terms and the house to six 2 year terms.

midgebaker, excellent idea. I particularly like corporate corporate contributions going into a general fund to be distributed equally. Think that would effectively end corporate funding. Love the right to recall idea and perhaps electing a stand-in at-large should the need arise to replace someone.

Mark, I too like term limits but like the cumulative total in both house and senate not to exceed.....(enter limit)

And NO retirement plan unless you contribute to it (like I have to)

And NO medical plan unless YOU pay for it (like I have to)

Item 1 has been ruled unconstitutional as has item 2.

Item three can be done now with petitions for recall. Takes some doing but it can be done.

Our whole political system is out of date. We have to realize we are operating under a charter that was made for just a few states and generally those states had similar populations. As most of the framers were businessmen and not career politicians many of the things included are no longer viable. In reading their papers I came away with the conclusion that most of them had no idea that congress men and Senators would spend much time in those position and would leave them to pursue and honest living in the private sector.

The whole idea that a State that has millions of citizens and has two Senators is equal in representation in the Senate to a state that has less than a million is mind boggling.

Are you aware that less than 20% of the US population can elect more than 50% of the Senate. Look it up.

Now we have the change rule. Before you can change the charter you need both houses to pass the change with a 2/3 majority and then it is sent to the states to be ratified. There you have to get another 2/3 majority to approve it. You think the sitting politicians in Washingto will ever slit their own throats.

Every business survives on new and innovative ideas. A lot of these ideas come from the newer people they hire to replace the older retiring or burnt out employees who are let go. Except in our government. Sure we get a few new ones here and there but they run smack dab into the establishment and by the time they have paid their dues and established themselves they have become just as tainted as the establishment, Look at the Republicans in the house on the stimulus. 100% in opposition of say the stimulus bill. Try to believe 150 persons from all over the US can come to the same conclusion without pressure on anything even where they should go to lunch.

Absolute, you might just be surprised. Wasn't a Mafia boss who said they didn't do crime anymore, all their businesses went legit? Just because they project a veneer of legality does not eliminate the possiblity of the use of violently coercive methods. Look around, those kinds of people don't just go away. They just hide it better. In the recent financial environment, where better to hide?

AZ
The lobbyists are more powerful. Why? Because if you stopped 100 of Mr. Gutierrez's constituents and asked them about his bill they would have no idea about what you're talking about. The problem is that even if the coward was voted out the damage will already be done if the bill passes. Much like all of these traitors voting to revise the BK laws and then wringing their hands over the damage it has done to citizens.

BTW: I call the cowards in Congress traitors because they have failed in their primary duty to the protect the Constitution which begins: "We the PEOPLE of the United States...".
Corporations are not people and putting the protection of a non-human before an individual citizen is treason in my opinion.

Only place you can find that "statement" in that context is on right wing blogs.

Absolute, you might just be surprised. Wasn't a Mafia boss who said they didn't do crime anymore, all their businesses went legit? Just because they project a veneer of legality does not eliminate the possiblity of the use of violently coercive methods. Look around, those kinds of people don't just go away. They just hide it better. In the recent financial environment, where better to hide?

Point well taken, opinion8ed, and I agree! But, you can’t ever give up on this for that exact reason! If our representatives are being pressured from both sides, we will at least win some of the battles! Giving up only makes it easier for them. I would rather fight and lose, then to lay down and surrender!

maybeblu

The lobbyists are more powerful. Why? Because if you stopped 100 of Mr. Gutierrez's constituents and asked them about his bill they would have no idea about what you're talking about. The problem is that even if the coward was voted out the damage will already be done if the bill passes. Much like all of these traitors voting to revise the BK laws and then wringing their hands over the damage it has done to citizens.

BTW: I call the cowards in Congress traitors because they have failed in their primary duty to the protect the Constitution which begins: "We the PEOPLE of the United States...".
Corporations are not people and putting the protection of a non-human before an individual citizen is treason in my opinion.

I agree that the lobbyists are more powerful, but only because we allow them to be. It didn’t use to be this way. I know we’ve had lobbyists from day one of our government. But, never has there been such an abundance of them, and why is that? Because we stopped pushing back! We allowed our government to step up to the line, and instead of pushing them back, we moved the line. So, again, they step up to the line, and again, we moved the line. We sent the message of "Hey, it’s ok, we’ll just move the line" to the lobbyists and our government! We have allowed this to happen.

You hear people all the time on the vine say "I love this country," and talk about how much our Constitution means to them, and what it stands for! And I just have to ask, "How much?" How much do you love this country? How much does the Constitution mean to you? Enough to fight for it?? At what point do you love your country enough?? At what point does the Constitution really mean something to you?? After the country as you know it is gone and the Constitution is no more, is it at that point that you love your country and Constitution enough?? By then, Well, it’s too late!!

391% == loan sharking.