Washington, D.C. - Today, in light of new legislative efforts and ever-growing controversies over the role of payday lenders in Americans’ lives, Citizens for Responsibility and Ethics in Washington (CREW) released a new study entitled, Payday Lenders Pay Up, which examines the payday loan industry’s efforts to gain influence on Capitol Hill.
The first-of-its-kind study explores how the payday loan industry has stepped up its lobbying and public relations efforts as well as its campaign contributions to federal candidates in the face of greater congressional scrutiny of industry practices. In 2006, Congress capped the interest rate on short term loans to military members at 36%. In the 110th Congress, Sen. Richard Durbin (D-IL) dropped a bill to apply the same cap across the board and he reintroduced that legislation earlier this year.
CREW has examined those campaign donations, which demonstrate how an industry with a previously low federal profile seeks to influence members of Congress to achieve a particular policy outcome. CREW found that the payday loan industry doubled its lobbying expenditures from $2,045,000 in the 109th Congress to $4,182,550 in the 110th Congress and doubled its campaign donations over the past three election cycles.
CREW also ranked the top 15 recipients of payday related campaign contributions over the 2008 campaign cycle. Sen. Tim Johnson (D-SD), chair of the Senate Subcommittee on Financial Institutions, was the leading recipient of payday contributions in the 2008 cycle, taking in $47,400. Rep. Luis Gutierrez (D-IL), chair of the House Subcommittee on Financial Institutions - who has taken the lead on a payday reform bill that has been criticized by consumer advocates, editorial writers, and the payday industry - was the 11th leading recipient of payday loan related donations, taking in $18,500 last cycle. Sen. Richard Shelby (R-AL), ranking member of the Senate Banking Committee, was the Republican who received the most from the industry, accepting $25,560, ranking him 4th overall.
Melanie Sloan, executive director of CREW, said today, “Payday Lenders Pay Up shows the payday loan industry is following the familiar path already cleared by other industries suddenly confronted with congressional oversight. Payday lenders have joined the ranks of defense contractors, investment funds and others who influence the legislative process through lavish political contributions, expensive PR campaigns, and strategic lobbying.”
Click here to view the report.
Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit legal watchdog group dedicated to holding public officials accountable for their actions. For more information, please visit www.citizensforethics.org or contact Jordan Libowitz at 202.408.5565 or email@example.com.