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Spencer Bachus – Payday Loans & Pawn Shops
The following story shows the hypocrisy of Spencer Bachus as he “regulates” the big banks that donates money to his campaign while at he same time he takes money from payday loan shops and pawn shops “not to regulate them.” Banks must loan money at a low interest rate while pawn shops can charge large rates of 100 to 200%.
Bachus vote can be purchased for a price!
He has received thousands of dollars from payday loan companies, pawn shops and pawnbrokers from Alabama and all across the United States.
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A recent report by Citizens for Responsibility and Ethics in Washington shows that Alabama, Florida and Kentucky had five of the 10 members of Congress receiving the most campaign contributions from the payday loan industry during the 2008 cycle. Of those five, Alabama had three.
Sen. Richard Shelby was Alabama’s top-ranked friend of the payday loan industry, pulling in $25,560 last year (fourth-highest in the nation and first among congressional Republicans). His Senate colleague Jeff Sessions was good for fifth in the nation, reporting $25,150 from payday lenders. And the eighth biggest congressional recipient of payday loan money — more than any other House Republican — was Rep. Spencer Bachus, at $22,500.
Alabama’s dominance in this ranking isn’t just an embarrassing glimpse into the realities of campaign financing. It’s a legacy that’s visible every day in our cities and towns, where colorful payday loan stores cluster densely among auto title loan outlets, cash advance shops and tax preparers offering refund anticipation loans. These establishments, some of which are open 24 hours a day, offer high-interest, short-term loans to hard-luck consumers. Many tack on a wide variety of fees, extraordinary penalties and late charges that trap borrowers in a cycle of debt. And a steady flow of cash in state and national elections makes sure the cycle continues.
The public policy arguments against predatory lenders are familiar. Usurious loans have been condemned since biblical times. One recent law review article claims that for 1,000 years, debates over usury were “arguably the marquee intellectual struggle in Western commercial history.” But it doesn’t take the wisdom of Solomon to see it’s simply a bad idea for consumers to dig themselves deeper into debt, especially in this turbulent economic climate.
So why does Alabama continue to allow this sort of behavior by lenders?
Stephen Stetson is a policy analyst for Arise Citizens’ Policy Project, a statewide coalition of 150 congregations and organizations that promote public policies to improve the lives of low-income Alabamians. Web site: www.alarise.org
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