Republican Rep. French Hill, the millionaire Little Rock banker, has joined a group proposing federal relief money for — this is not The Onion — the payday lending industry.
Apparently, unless the bloodsuckers get taxpayer help, they won’t be able to profit sufficiently from Shylockian loan rates for poor people. French Hill, who is on the oversight committee for relief money spending, is an unsurprising fox in the henhouse. You need look only at opensecrets.org’s summary to appreciate who butters his bread.
Politico reports. It is an essential business, say 24 Republicans and 4 Democrats, including French Hill. If billionaire hedge funders qualify for help, why not the small-time profiteers?
The American Financial Services Association, whose members include installment lenders referred to in Thursday’s letter from lawmakers, argues that the intent of the program is to provide assistance to a broad base of businesses, including non-bank consumer lenders.
“As the economy reopens, consumer lending — from auto finance to installment loans — will be crucial to jumpstarting growth and our members will be there to help,” the group’s spokesperson, Ed McFadden, said Friday.
At current rates, various online lenders are charging an annual interest rate of 200 to 600 percent for a 28-day loan. (No, those are not typos — 200 to 600 APR.)
Given that banks currently can get money almost free from the Federal Reserve (about .25 percent annual interest) you’d think there’s plenty of private capital to help these noble small businesses get an 800 percent return on that money.