During the last two election cycles, payday lenders and their trade groups have contributed almost 2.3 million dollars to the US Congress.
Those amounts include dollars given to candidates and their political action committees. I have included data from among a group of sixteen donors who are known to be or to represent high-cost payday or installment lenders and who are registered under "Miscellaneous Financial Services" in FEC filings.
- Rep. Kevin Yoder, Republican from Kansas: Yoder received $98,857. Donors include: Cash America ("CSH"), The Community Financial Services Association ("CFSA"), the Online Lenders Alliance ("OLA"), and QC Holdings ("QC").
- Rep. Jeb Hensarling, Republican from Texas: The leader of the House Financial Services Committee garnered $94,250 during the last two cycles. Seven private companies and four trade associations came forward to support the Texas congressman. The majority of his contributions were received during the 2014 cycle, after he assumed the Chairmanship of the FSC.
- Rep. Lynn Jenkins, Republican from Kansas: $72,100 - all from QC Holdings.
- Rep. Pete Sessions, Republican from Texas: Total gifts - $71,500. All by itself, Cash America gave $60,000 to Sessions. CFSA, QC, and Ace Cash Express ("ACE") added $5,000, $4,000, and $2,500, respectively.
- Rep. Steve Stivers, Republican from Ohio: $63,000 Stivers' largest contributors were Ohio firms CSH and Check$mart.
- Rep. Patrick McHenry, Republican from North Carolina: $58,000. Even though payday lending is illegal in McHenry's home state, he accepted contributions from payday lenders ACE ($8,500), CSH ($3,000), Check$mart Financial ($17,000), and QC ($6,500). He also cashed checks from three trade associations.
- Rep. Blaine Luetkemeyer, Republican from Missouri: $51,700. Ace Cash ("ACE"), CSH, CFSA, National Installment Lenders Association ("NILA"), OLA, QC, and Security Finance ("SF").
- Rep. Gregory Meeks, Democrat from New York: $36,600. ACE, Advance America ("AA"), CSH, Check$mart, CFSA, OLA, PLS Financial ("PLS"), and QC.
- Sen. Patrick Toomey, Republican from Pennsylvania: $35,000. CSH, Check In to Cash ("CIC"), Check$mart, EZCorp ("EZ"), OLA, QC, SF.
- Rep. Ann Wagner, Republican from Missouri: $34,750. CSH, Check$mart, OLA, QC.
- Rep. Randy Neugebauer, Republican from Texas: $34,000. ACE, CSH, CIC, CFSA, NILA, QC, SF, and World Acceptance ("WRLD").
- Sen. Robert Menendez, Democrat from New Jersey: $30,700. CSH, OLA, QC.
- Rep. Spencer Bachus, Republican from Alabama: $29,500. ACE, CSH, CIC, QC, SF, WRLD.
The highest concentration of contributions on a state-by-state basis went to Congressional leaders from Texas, Kansas, California, Ohio, and Missouri. Hardly anyone bothered to post a check to representatives from Vermont or Oregon.
No one from these companies and associations made a contribution to Al Green (D-TX). Here is what he had to say during a March 24th hearing on Operation Chokepoint in the House Committee on Financial Services:
A bank was fined $1.4 million for knowingly facilitating fraud. A bank paid $1.2 million in fines for fraudulent activity. A bank paid $4.9 million in fines. The processor was allowed to make hundreds of thousands of withdrawals over a twenty-month period on behalf of a telemarketing company...There is no effort on the part of the FDIC to eliminate payday lending. But when we see these egregious circumstances, we have to do something. The banks are there and they know these things are going on...And then, there was a $15.5 million settlement. Two million fraudulent charges by a third-party processor. Two million. These are people that are being hurt. I hear what my colleagues are saying about businesses that are being operated lawfully. But that is not the case here. There is a reason why we are looking into things into this area.
Green's point is pretty simple: what's wrong with protecting people from being defrauded?
Green's comments were in response to criticism of the FDIC's efforts to rein in bank participation in activities that involve illegal debt collection practices by online payday lenders. Those critical of the FDIC were arguing that the regulator's efforts amounted to an arbitrary decision to pick winners and losers. But those criticisms ignored that only targeted activities related to payday lending involved illegal activities.
Typical of those critiques was the commentary on March 25th from Mick Mulvaney (R-SC):
Operation Choke Point's targeting of certain industries hasn't stopped. It's expanding. It's broader now," said Mulvaney. "Pawn shops, payday lenders, gun stores. I'm from South Carolina. That's a big part of what we do.
Although it is undoubtedly coincidental, Mulvaney received $5,000 from the Community Financial Services Association and $3,500 from Cash America in 2014. In 2012, he received $2,500 from Community Choice Financial.
During a hearing on Chokepoint last July, Rep. Luetkemeyer criticized the Justice Department for its efforts to reduce fraud by processors. Rep. McHenry conducted the hearing.
Note: these figures are from opensecrets.org.