Critics: Payday Lenders Preying on Blacks, Latinos
While payday lenders describe themselves as providing a helpful service to those with little access to credit, critics say they are little more than loan sharks, preying on poor and minority borrowers and leaving them far more strapped for cash than before. “What they are really providing is access to long-term debt traps which too often lead to extra overdraft fees, credit card delinquency, trouble paying bills including medical expenses, even bankruptcy,” says Leslie Parrish, senior researcher at the Center for Responsible Lending. In a new study by the group, the center concludes that payday lenders are nearly eight times more concentrated in California’s Black and Latino communities than they are in White neighborhoods, sucking up some $247 million in payday loan fees. Even when income, poverty rates and education are factored in, a wide racial gap remains, the center argues. The predatory loans, CRL contends, trap borrowers in long-term debt at 400-percent interest rates. It would like to see Congress cap those rates at 36 percent. Both the U.S. House and Senate have introduced caps, but they do not preclude states from instituting their own ceiling on the loan rates. “Predatory Profiling confirms with solid analysis what we have always known intuitively,” said Jose Cisneros, treasurer of the City and County of San Francisco. “Take a walk through San Francisco’s Mission District, and you’ll see too. Working-class families of all races and ethnicities deserve policies that keep more of their hard-earned dollars in their pockets – not policies that trap them in cycles of debt.” Among other findings in CRL’s study, “Predatory Profiling: The Role of Race and Ethnicity in the Location of Payday Lenders in California,” the nearest payday lender is almost twice as close to the center of an African-American or Latino neighborhood as a largely White neighborhood; and race and ethnicity play a far less prominent role in the location of other financial institutions, such as banks. “Payday loans are a debt trap – and in California, that trap ensnares more African Americans and Latinos by a staggering margin,” said Ginna Green, spokeswoman for CRL’s California office. “The only solution that springs the trap is a comprehensive, small-loan rate cap that covers all small-dollar loans. California’s payday lenders don’t deserve to be above the laws that regulate their competition.”

Obama Aide Brushes Aside Cheney Comment
Former Vice President Dick Cheney didn’t know what he was talking about when he blamed President Obama for making the nation less safe, a senior administration diplomat said Sunday. “I don’t have a clue what he’s talking about,” said U.S. special envoy Richard Holbrooke. “We are treating Afghanistan and Pakistan as a single theater. We are going to address it in an integrated way. We are going to give it more resources. And that is where the people planning the next attack on the United States or on our European allies are certainly doing it. So I just do not understand what his comments were referenced to.” Holbrooke was referring to comments Cheney made two weeks ago in an interview with political reporter John King of CNN when he was asked if he thought Obama had made the country less safe. Said Cheney: “I do. He is making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.”

TAGS: Blacks and Latinos, Dick Cheney, obama, payday loans, predatory lending

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