Maddow: People Not Smart Enough to Know 400 Percent Interest is Bad, Therefore Federal Gov't Needed
It doesn’t take a rocket scientist to realize that so-called payday loans probably aren’t the most reasonable option when it comes to short-term borrowing. But according to MSNBC’s Rachel Maddow, it takes the federal government to let you know.
On her April 28 program, Maddow charged that these lenders engage in unscrupulous practices, despite offering a service that their clientele is willing to buy.
“Last week we did our best to explain payday lenders – who they are and who they are, who they – what they do and who they are, excuse me,” Maddow said. “Payday lenders are basically loan sharks with nice store fronts. They specialize in turning what look like short-term loans into ongoing obligations that rollover every two weeks, piling up fees until they’re ultimately collecting 400 percent annual interest.”
Maddow aimed her attack specifically at Allan Jones, a Tennessee businessman who offers such a service to willing participants and who – the horror! – owns a football stadium. She alleged that Jones somehow was able to influence Republicans into holding up Senate Banking Committee Chairman Sen. Chris Dodd’s, D-Conn., financial reform legislation.
“Payday lending king Allan Jones has argued that his business is poor,” Maddow said. “That payday lenders make so little money that they couldn't bear any restrictions on their loan-sharking that might come from being regulated under the new Wall Street reform act. Lest you think it is critically awkward for someone like Allan Jones to plead poverty while he also brags about owning a full-size football stadium on his estate where he hosts private college football games for his own amusement, consider that Allan Jones and payday lenders have apparently convinced Republicans with their argument.”
Although Maddow failed to make clear what payday lenders had to do with the financial collapse the bill is purported to address, she argued the Consumer Financial Protection Agency provision in the legislation was appropriate.
“The proposed financial reform bill from the Democrats includes a consumer financial protection agency that would enforce regulations on payday lenders. A new proposed Republican alternative to the Democrats’ bill would leave payday lenders, on the other hand, the way they are now – totally unregulated by the federal government, free to roll people into 400 percent interest loans. Right there on page eight of the summary of the Republican bill, Republicans describe their council for consumer financial protection which leaves payday lenders like Allan Jones exactly as unregulated as they are right now.”
As usual, missing from her attack on Republicans was any suggestion that payday borrowing is an individual’s personal choice. Judge Maddow deemed Jones’ business practices usury and invoked the Bible, which condemns usury.
“It's spelled u-s-u-r-y, usury,” Maddow said. “It's in the dictionary, also actually in the Bible.”