Predatory Financial Firms Have Found A Receptive Audience At The Trump WH
The payday lending industry, long accused of preying on the financial hardships of vulnerable Americanson vulnerable Americans facing financial hardship, has found a sympathetic ear in President Donald Trump’s White House.
After Trump entered the Oval Office, Obama-era rules reining in the payday loan industry’s predatory practices were placed under review, and the president put former South Carolina Rep. Mick Mulvaney in charge of the agency tasked with protecting Americans from such loan companies.
As a congressman, Mulvaney had referred to the Consumer Financial Protection Bureau as a “joke” and signed onto legislative efforts to shut down the agency — which was established in response to the 2008 financial crisis.
The Obama-era rules are still under review, and the payday loan industry is eager to influence the final outcome.
According to The Washington Post, leaders of the industry view contributions to Trump’s campaign as the key to White House access and recently encouraged industry members to keep the money flowing.
“Every dollar amount, no matter how small or large it is” is important, Michael Hodges, founder of one of the country’s largest payday lenders, said during a 48-minute webcast posted online in September and recently obtained by The Post.
“For example, I’ve gone to Ronna McDaniel and said, ‘Ronna, I need help on something,’ ” Hodges said. McDaniel is the current chair of the Republican National Committee (RNC). “She’s been able to call over to the White House and say, ‘Hey, we have one of our large givers. They need an audience. … They need to be heard and you need to listen to them.’ So that’s why it’s important.”
Hodges, whose company is Advance Financial, bills himself as a top Trump fundraiser, spoke with others during the webinar, including Max Wood, of Borrow Smart Compliance, which also sponsored the event.
The Post reported that the webinar offered “surprisingly frank insight into the payday lending industry’s strategy to push for weaker government regulations by forging a tight relationship with the Trump administration and the president’s campaign.”
Hodges and three other industry insiders warned that Senator Elizabeth Warren (D-MA) — a presidential candidate and also the brains behind the CFPB — would pose a major threat to payday loan companies should she ever become president.
They referred to Trump as their “ultimate backstop” against attempts to defeat legislation preferred by the industry, with Wood saying that “When Trump was elected, the needle moved in our favor — finally.”
Wood stressed the importance of donating to Trump’s campaign, saying contributions would help his re-election and “will give [Hodges] access in the event that we need to have access to the president.”
Hodges told The Post in an interview that while he is “enthusiastic” about Trump, he has never used his position to ask for help from the Trump administration.
“When I am talking about access, I am not talking about the administration. I haven’t lobbied the administration,” he said. “I have not gone over to the White House because of Ronna McDaniel. … That just has not happened.”
However, during the webinar, Hodges said he would get a “boost” for showing that he has brought new donors on board, even if their contributions are small.
“That is important to the campaign, which means it’s important to the president, which means it’s important if you ever had to call on anyone for anything in the administration,” he said. “That’s how those things work.”
The Post reported that the webinar was initially discovered by advocacy groups Allied Progress and Americans for Financial Reform, and after the newspaper inquired about the event, it was promptly taken down.
“We have here a striking example of how money in American politics leads to the abuse of consumers in the financial services marketplace,” Linda Jun, senior policy counsel at Americans for Financial Reform, told The Post.
Likewise, Allied Progress Director Derek Martin said: “This presentation reflects the worst of Washington, D.C. — wealthy executives buying off politicians so they can keep their predatory business model intact.”