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.
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.”
Read more here.
— Posted by Alexander Reed Kelly.