Bernie Sanders’ campaign for the Democratic presidential nomination energized millions of people with his straight talk about the need to take on the big banks, get corporate money out of politics and pass a financial transaction tax. Although not as strong as many of us would like, a good bit of the Sanders agenda made it into the current draft of the Democratic Party platform.
This is a testament to a growing and organized base of true progressives and the power of Sanders’ campaign and agenda.
Work to advance these critical reforms has been happening for years, but it has fresh momentum and power in this political moment. Now, as part of a longer-term strategy to move big progressive goals, Sanders and his supporters will continue the push for a stronger platform and commitment to that platform into and beyond the Democratic National Convention.
In the meantime, there’s a big banking fight in front of us right now. It’s a fight that could result in a huge win for families and a death knell for the predatory practices of an entire industry — payday lending. It’s time to rein in an industry that thrives by stripping wealth from people who don’t have much to begin with — like Candice Byrd.
Byrd was in her early 20s and working a sales job when she took out a $500 payday loan to cover a car payment. As the payoff date approached, the lenders called and convinced her to roll it over into a new loan to give herself a little cushion. The debt trap snapped shut. Unable to keep up with the devastating loan payments, Byrd lost her car and then her apartment. Her credit was ruined. She wasn’t even 25 years old yet.
“These places want you to keep borrowing,” Byrd told The New York Times. “They don’t want you to climb out of the hole.”
Payday lenders, who on average charge interest rates nearing 400 percent, are the ultimate bottom feeders of a financial sector that is chock-full of corporations worthy of the term. More than half of payday borrowers end up paying far more in fees and interest than they originally borrowed.
In addition, one in five car title borrowers lose their car — often even after paying back more money than they originally owed. What these statistics don’t show are the sleepless nights, the missed meals and the desperation of families trying to keep up with unaffordable, unsustainable payments.
Fortunately, the Consumer Financial Protection Bureau, an agency championed into existence by Sen. Elizabeth Warren (D-MA), along with organizing groups around the country, has proposed a rule that could keep billions of dollars in families’ pockets annually. While the rule isn’t perfect, it’s a real opportunity to start ending this form of predatory lending. The payday industry knows this. That’s why they’ve dumped $13 million to hamstring the consumer agency and water down the proposed new rules.
Besides the huge infusion of money, the payday industry campaign to defeat this rule includes the creation of a mass-comment generating machine, and a media strategy to paint themselves as the victims.
That is why we need to fight fire with fire and generate tens of thousands of comments from our side making it abundantly clear to the CFPB that there is widespread support for a strong rule and real regulation of debt-trap lenders. The deadline for comments is September 14, so the clock is ticking.
Winning this campaign means an end to the debt trap nightmare for families and communities. It also means opening up space for alternatives like Postal Banking and public banking.
Everyone energized by the Sanders campaign’s call to break up the big banks can help put an end to a business model that depends on trapping people in a cycle of debt. Start right now by spending two minutes adding your voice by making a comment that will strengthen the proposed rule and push it across the finish line.