Payday Lending Is a Priority for Congress, Rep. Porter Says

Mar.07 — Rep. Katie Porter, a California Democrat, discusses the testimony by the Consumer Financial Protection Bureau’s Kathleen Kraninger. She speaks with Bloomberg’s David Westin on “Bloomberg Markets: Balance of Power.”

Author Since: Sep 20, 2018

  1. Katie Porter is a giant. A true representative. No Republican would ever do the work. Work is simply not their thang. Having lunch with lobbyists and getting paid by them is their work ethics.

  2. Ohio Sen. Sherrod Brown and other Democrats on the Senate Banking Committee on Tuesday accused newly appointed Consumer Financial Protection Bureau chief Kathy Kraninger of abandoning the agency’s consumer mission by moving to overturn restrictions on payday lenders.

    “Director Kraninger wants us to believe that an endless cycle of debt is a benefit to hardworking families," Brown said of the the CFPB’s proposed abandonment of a regulation that would require payday lenders to determine upfront whether low-income borrowers could afford the terms of the small loans they were securing with income from their next paychecks.

    The bureau last month suggested the rule should be scrapped because it would reduce consumer access to credit, and there’s insufficient evidence to justify it. It is taking public comments on the change for 90 days.

    Brown and other Democrats on the committee strongly defended the regulation to Kraninger on Tuesday.

    Brown argued that that payday lenders like Ace Cash Express aim to ensnare customers in a cycle of debt by giving them high-interest loans they can’t repay and repeatedly refinancing them. Maryland Sen. Chris Van Hollen echoed Brown’s criticisms, noting that payday lenders stand to pocket more than $7.3 billion more every year if the restriction is removed.

    Kraninger – a Chagrin Falls native who was a college intern in Brown’s congressional office – told Brown she’d like to see “a broad panoply of products available to consumers, and they can make the best decision possible for themselves.” She said the rule is being challenged in court, and that her agency is reviewing all comments before it decides whether to rescind it.

    Brown also criticized Kraninger for continuing to employ a man with “a history of writing racist statements on his blog.” The employee, Eric Blankenstein, is responsible for enforcing anti-discrimination laws.

    As a University of Virginia law student in 2004, Blankenstein argued online that “hate-crime hoaxes are about three times as prevalent as actual hate crimes” and that not everyone who uses the “n-word” should be labeled a racist, according to The Washington Post. In 2016, he argued online that it wasn’t racist to question whether President Barack Obama was born in the United States.

    “Replace President Obama’s Kenyan heritage with Swedish (and for fun change his name to Sven Laarson), but he holds the exact same positions, says the exact same things, etc. If Trump went around arguing that President Laarson was actually born in Malmo, you wouldn’t call that racist, would you?” he wrote, according to a The New York Times report. “Help me understand why questioning the place of President Obama’s birth is racist.”

    The Post reported that Blankenstein apologized by email to colleagues for using “intentionally provocative language" in past blog posts.

    “Poor judgment in my choice of words back then, or how I framed my arguments, does not make me racist or a sexist, and I have always rejected racism and sexism in the strongest terms possible,” Blankenstein said in the email.

    Brown noted that black home buyers are denied mortgages twice as often as white home buyers, and said it’s inappropriate for someone with “those attitudes” to police the situation.

    “When you took over I asked you to remove him," said Brown.

    Kraninger replied that Blankenship’s statements were being investigated by the CFPB’s inspector general.

    “Senator, I believe in due process and I certainly believe that the process should be followed in this case,” Kraninger said.

    “This isn’t due process in terms a court of law,” said Brown, the committee’s top Democrat. “This is someone who has proudly uttered racist statement after racist statement after racist statement and you have chosen to keep him in a job to enforce laws on anti-discrimination.”

    Sherrod asks Director Kraninger—with that in mind—if this is really the guy she wants in charge of anti-discrimination laws.

  3. Sen. Brown also said that Kraninger – a former Homeland Security official who oversees the budget for the Homeland Security and Justice departments – was "partially responsible" for the "terrible" Trump administration policy of separating children from their families at the border.

    Brown said she did not respond to a letter he wrote with Sen. Elizabeth Warren that asked questions about her role, and refused to answer his in-person questions about that policy. He added that he was struck by her lack of "empathy" for children separated from their parents by border officials, as well as her lack of empathy for people who lost their homes to foreclosure.

  4. That was like watching the class know-it-all being taken down by the true professional in the room. And ain't it oh, so funny that REAL INTELLGENCE [like Congresswoman Porter's] is not only focused, determined, succinct and well articulated . . . it is also quietly spoken. What classy 'Lady'.

  5. Is it me . . . or is it reasonable for me to suspect that Trump's department directors are all clones. Middle-aged white, women with no specialism in the sectors they oversea. And, not only do they all look the same, they speak the same, their syntax is similar, their expressions are equally bland, their answers to detailed questioning equally banal and their callous indifference is manifest. I don't think it's too harsh to observe that their appearances before Congressional committees is like watching an episode of Stepford f**king Wives . . . just sayin'

  6. Who is this idiotic director? What are her qualifications–she can't even do financial math. She is dancing and prancing with extrapolation and uses multisyllabic words she does not even understand and she evades the question–then she claims she understands what the Representative is talking about.

    This director won't pass basic business math. She is as idiotic as Trump–she should be thrown out of office–taxpayers don't have to pay salaries of idiots in govt payroll.

    With due respect to the Congresswoman, in my Basic business math -what you pay at the end less what you got in the first place—200-160= 40 cost of borrowing, despite the fancy names people use to circumvent the usury law.

    If both the financial charge and interest are deducted from the loan, the net amount borrowed is 160. 40/160=25% actual % of interest. There are 365 days in a year, but the borrowing is only for 2 weeks or 14 days. There are about 26(14 days in a year).

    One pays principal + interest at due date = 1+25%=1.4. Compute (1.25) raised to 26 power = and the equivalent of this compounded interest is so much more than 520%. The Congresswoman is using 20% at simple interest for 26 weeks=520%. Here, the lender shows income of only 5 plus x so the principal would have grown only to more than 6x.

    If I am the lender, I can recycle the principal plus interest starting with the first $40 but enlarging every 14 days. Thus, I am using compound interest calculations. I expect my original money of $160 to be about 330 X at the end of the year.

    If only the financial charge is deducted in advance and interest is collected at the end, my computation will be slightly different using a combination of annuity and annuity due.  In that case my $180 principal will be about 31x only at the end of the year.

    This is truly worse than Senator Warren originally imagined. Democrats have a good reason to correct this situation.

  7. This is a hugely important issue and is just one in the bucket of industries that MUST be regulated. The Tea Party, aka Freedom Caucus, aka Mick Mulvaney have been trying to eliminate all banking regulations (it's their mantra). In my mind "Freedom Caucus" means businessmen who want all regulations eliminated so that THEY can be FREE to do whatever they want so they can make as much money as they want, regardless of the consequences for the rest of the population.

  8. Rep. Porter is right 'on the money'..and a wonderful thing too. This Bloomberg YT was posted March 7th. A few days later during hearings, Ms. Porter (a former law professor) offered the CFPB gal Kraninger a calculator, to compute her answer to a question asked. Ms. Kraninger was unable to provide the info. Hmm…Those interested in 'payday lenders' can look up Southern Poverty Law Center's active involvement and legal advocacy on this critical issue. People in the South, people of color, are clearly not 'living beyond their means', In many cases rather, they need to pay parking tickets, or some such, in order that their cars are not seized, and they can continue to get to work. They are made to pay STRATOSPHERIC interest for the money they need by these fiduciary-ghoul payday companies, as much as 520%. Dear God in Heaven…

  9. This is so pathetic and emblematic of average Americans, Right, Left or Center. 370 views and 16 thumbs up and even 1 thumbs down from some poor soul. This woman, Rep. Katie Porter, is the REAL DEAL. A real life civil servant. A pit-bull working for the people. She should be cloned and sent into all levels of state and federal government.

  10. Payday lending is the biggest scam to trap and deprive the poor. It should be outlawed, people just need to learn not to live beyond their means. Being poor is not a disease but these lenders are making it a contagious one. 300 percent interest or more is criminal and the fact they exploit the elderly and young makes them the lowest of the low.

  11. Payday loans are legal theft, their interest rates are a rip off, it's time these sharks were put out of business or strictly controlled by the government, they prey on the least well off in society who are desperate enough to agree to any rate of interest to try and solve their problems who then get further into debt. This is a viscous circle to which there is no escape from the problems they have as the interest rate just keeps mounting up as the debt gets bigger.