ISAIAH News: Acting on our Faith
to Create a Better World
Poverty profiteers, which include payday lenders, pawnshops, debt collectors, and subprime auto and home loan companies, have created an entire business model devoted to taking advantage of low-income Minnesotans.
ISAIAH leaders are saying, “enough is enough!” Our financial system has lost its integrity and its system of checks and balances. We are actively working to shift our country’s policies from protecting money to protecting people and to hold our financial institutions accountable to serving the goals of health, wholeness, and shared prosperity for all.
Continue reading to find out what ISAIAH’s leaders been doing over the past few months to stop poverty profiteering:
Calling Out the Private Equity Baron Who Finances CarHop
More and more low-income and working class Minnesotans are getting ripped off by CarHop, the high-cost/high-hassle predatory car sales & loan chain operating in low-income and working-class communities across our state.
In early August, we kicked off our campaign to stop subprime car lenders from defrauding low-income Minnesotans like James of Brooklyn Park who paid over $15,000 for a car that is worth about $3,500 – and barely runs.
We also released a report linking CarHop to a San Francisco private equity manager who claims to be a “values driven” investor with high ethical standards while he makes big profits from shady and even illegal business practices that drive his customers deeper and deeper into poverty. You can read the report here.
This predatory auto loan financing corporation is just one example of the many industries now being driven by private equity and hedge fund barons who work with CEOs experienced in ripping off low-income and working class consumers, skating across the edges of the law, making exorbitant profits and living in luxury, far from the struggles of their customers.
Strong Payday Lending Rules Announced by the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB), in response to meeting with thousands of people of faith, including hundreds of Minnesotans, has announced strong rules to protect everyday people from predatory payday loans. The proposed regulations would crack down on some of the tricks payday lenders use to trap people in a cycle of debt. Read more about the proposed rules here and here.
Before the rules can go into effect, there is a public comment period. We can be assured that payday lenders – with more storefronts across the country than either McDonald’s or Starbucks – will work to protect their $7 billion a year profit.
CFPB Director Richard Cordray accepted ISAIAH’s invitation to come to Minnesota to talk about regulating payday lending last March.
ISAIAH will be coordinating a Payday Lending Comment Campaign in Minnesota. Keep your eyes open for a call to action in the next few weeks.
ISAIAH leaders Pastor David Johnson, Bishop Richard Howell, Jr., and Brian Fullman traveled to Washington DC in August to testify before the Consumer Financial Protection Bureau about payday lending. They shared personal experiences, talked about just lending, and encouraged strong payday lending rules.
Minnesota Corporations and Legislators Support Poverty Profiteering
ISAIAH released a report “The High Price of Poverty: How Big Banks, Wall Street, and the Minnesota Legislature Facilitate Poverty Profiteering” showing how the Legislature is complicit in allowing poverty profiteering to continue.
Minnesota’s poverty profiteers use politics to their advantage in two ways: they block regulation of their industries, as well as fight laws that would raise Minnesota’s poorest out of poverty, like a higher minimum wage or earned sick time.
In the 2014 and 2016 Minnesota Legislative Sessions, given the opportunity to regulate the sky-high interest rates payday lenders charge, the Legislature instead chose to listen to corporate campaign donors.
Face-to-Face Community Conversations
In early September, we will be launching a door-knocking campaign to talk with a couple thousand people about payday lending and asking them to pledge to vote. This effort will help inform the content of our 2017 platform around ending poverty profiteering in the state.
Together we can end poverty profiteering!