DC is in harmonic convergence with Big Business. That’s the business model. That’s the primary reason for everything that happens in that fetid and festering sewer.
The Left-Right divide that is destroying the US – is but of secondary import in DC. Sure, DC’s Denizens play the partisan games for the TV cameras and Internet clips. But when it comes time to do DC’s corrupt business? Nigh everyone in DC sings Kumbaya.
DC’s cronyism-uber-alles creates all sorts of whiplash-inducing ideological inconsistencies. Most flagrant of all? The DC Left routinely sides with Big Business.
To wit: DC Leftists have spent the last decade-plus doing the bidding of Big Tech – the hugest companies in the history of the planet.
And DC Leftists are increasingly doing the bidding of Big Banks. You know, the Big Banks that conjoined with Big Government to corrupt the home lending industry and in 2008 destroy the global economy.
In the name of “helping the Little Guy” – DC Leftists are asking Big Government to murder what few competitors to Big Banks Big Government hasn’t already murdered.
Here’s the Leftist and exceedingly ridiculous National Consumer Law Center (NCLC) doing exactly that….
Predatory Installment Lending In the States 2022:
“Caps on interest rates and loan fees are the primary vehicle by which states protect consumers from predatory lending. In the absence of rate caps, exploitive lenders move into a state, overwhelming the responsible lenders and pushing abusive loan products that trap low-income consumers in never-ending debt.”
There is so much stupidity contained therein.
First: A definition of a term. “Installment lending” – is payday lending:
“‘Payday loans’ are so named – because poor people take the loans when they run out of cash prior to payday. Like, say, when their car breaks down – and they need to get the car running…to get to work to get paid on payday. Rich people don’t need payday loans – because they have the money to cover things like that.”
NCLC wants to impose interest rate and loan fee caps on these loans. Which are price caps. And price caps destroy the products capped.
Price Controls Cause Shortages:
“In a shortage, there are people willing and able to pay the controlled price of a good, but they cannot obtain it. The good is simply not available to them.
“Experience of the gasoline shortage of the winter of 1974 should make the concept real to everyone. The drivers of the long lines of cars all had the money that was being asked for gasoline and were willing, indeed, eager, to spend it for gasoline.
“Their problem was that they simply could not obtain the gasoline. They were trying to buy more gasoline than was available.”
You want to make it harder for poor people to get loans? Cap the prices of their loans.
The NCLC claims “Exploitive lenders move into a state, overwhelming the responsible lenders….”
You’re telling me the likes of Bank of America (Market Cap: $260 billion) and Wells Fargo (Market Cap: $152 billion) are being “overwhelmed” by payday lenders renting tiny storefronts in strip malls in our poorest neighborhoods? How utterly absurd.
Payday lenders move in – because there is no one else lending to poor people. Big Banks certainly don’t lend to poor people. In fact, Big Banks do as much as possible to do no business at all with poor people:
“(I)n 2017, a survey conducted by the FDIC found that the number of unbanked households in the United States was 8.4 million, with an additional 24.2 million underbanked households, households that are not participating or have limited participation in traditional financial institutions….
“(T)he banking system is not designed with low and middle class households in mind….(O)verdraft fees, debit card swipe fees, ATM withdrawal fees, wire transfer charges, among other charges and fees are imposed. These charges that appear around every corner of the banking system create a significant burden and barrier of entry for low and middle income individuals.
“To make matters worse, these costs for low to moderate income individuals are difficult to avoid. Overdraft fees are particularly unavoidable for people who live hand to mouth. While banks will deposit funds into accounts only on business days, withdrawals can be made anytime of the week. Banks will also often take time to show the true balance of someone’s checking account leading to monthly overdraft fees of up to $34.”
Payday lenders are trying to do what the Big Banks won’t – help poor people.
And the Leftist NCLC is helping Big Banks – by demanding Big Government destroy payday lenders.
Because DC is a very, very confounded and confounding place.