Fresh signs surfaced today of the influential payday loan industry's muscle in Washington, where lenders' attempts to stay out of the reach of federal regulators may be bearing fruit in the U.S. Senate.
As the Huffington Post Investigative Fund reported last week, the industry is spending record sums -- about as much on lobbying in 2009 as JP Morgan Chase & Co. Now The New York Times' Sewell Chan reports that Sen. Bob Corker, the Tennessee Republican who is playing a key role negotiating with Dodd on the drafting of financial regulation legislation - and who received campaign contributions from payday lenders - has secured Dodd's agreement to scale back substantially the power that a new consumer protection agency would have over payday lenders and other nonbank companies.
The Times attributes the assertion to three unnamed sources, and says Corker achieved Dodd's assent when talks broke down with the banking committee's top Republican, Richard Shelby. Corker -- who has received thousands of dollars from payday lenders, many of whom operate in Tennessee -- asserts to Reuters that he's all for consumer protection and, contrary to The Times' report, "there are no carve-outs for anybody." And Steven Schlein, a spokesman for the industry's trade association, the Community Financial Services Association, tells us that "there's no deal whatsoever. It's premature to suggest there is."
The world will know soon what Dodd and Corker decided - and how lasting the industry's impact will prove. The proposed legislation is to be made public within days. And after that? More lobbying and jockeying for votes among senators, an effort to reconcile differences with the House - no minor task, probably. And then, perhaps, a showdown with President Obama, who wants consumer protections in a new federal regulatory structure that extend to any company that provides financial services, including payday lenders.
For its part, the payday industry doesn't seem fazed by the focus on its campaign and lobbying muscle. Referring to the Investigative Fund's story on its tactics, the industry's "Payday Pundit" blog notes: "Yes, the industry has an effective, well-organized lobbying effort and puts a lot of money behind it. While the article is not intended as a compliment, why don't we all take it that way?"
Read more: http://huffpostfund.org/node/1436#ixzz0hnxa3Etb
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