Is Elizabeth Warren Stepping Into Sharkskin?

The respected Massachusetts senator wants to help the poor and and a flagging U.S. Postal Service by turning “post offices into loan-sharking bodegas in low income neighborhoods … giving out short term loans to the desperate poor against their coming paychecks,” investigative reporter Greg Palast writes at Reader Supported News.

Palast explains:

Her intentions are good. She wants to put private payday lenders out of business. These are the predators, centered in poor neighborhoods, who will lend you money for a few days or weeks until your next paycheck. Here’s the catch: you have to sign over your paycheck in advance – and the effective interest runs an average of 391%. No kidding.

But the senator proposes to get rid of these payday predators by turning every post office into a financial fleecing factory.

… Warren’s plan is based on a scheme promoted by Mehrsa Baradaran, formerly a lawyer with the lobbying firm for the big banks, Davis Polk & Wardwell. In a New York Times editorial (which failed to mention her bank lobbying work), Baradaran wrote that there are “essentially two forms of banking: regulated and insured mainstream banks to serve the needs of the wealthy and middle class, and a Wild West of unregulated payday lenders and check-cashing joints that answer the needs of the poor – at a price.”