Government Watchdogs Eliminating Choices for Low Income Households

Everybody knows there are checks and balances implemented at the government level to help protect consumers. Oftentimes, however, these government “watchdog” groups go overboard when it comes to how they police things. Right now, one of the most talked-about watchdog groups, the Consumer Financial Protection Bureau, is really pushing the envelope by making attempts to extinguish the payday lending industry – and industry that serves millions of lower-income households. It really does not come as any surprise, as the government has a penchant for using the poor of this country to further its own agenda. One look at how the welfare system has literally trapped people in a cycle of poverty is proof enough that sometimes too much government really is too much after all.

Our government, which some compare to the Orwellian entity Big Brother, has to do what it can to shift blame and get rid of their competition. Who could possibly compete with the juggernaut that is our Federal government? Any company that offers options that actually help low income people. When lower income households have no other options, they turn to government assistance and become part of the never-ending welfare cycle.

Let’s take for example, Obamacare. This initiative forced millions of people away from affordable, albeit limited insurance plans. Another example is how the payday lending industry has been absolutely vilified in recent years. With nearly 12 million Americans relying on payday lenders, the CFPB has made it their mission to wipe this industry out altogether via some controversial new regulations that they have proposed.

The CFPB’s spin machine has gone into overdrive; labeling all short term loans as “debt traps” and condemning the fees that payday lenders have to charge in order to stay in business and make modest profits. This bureau routinely makes mention of payday loans with annual percentage rates that would reach up to 300 percent. The truth of the matter, however, is that payday loans are not designed to be paid back over a year, but over the course of a few weeks. By cooking the books and telling people about worst-case-scenario loan fees that never come to fruition, the CFPB has managed to make the payday lending industry appear to be villainous at best.

People who regularly take out payday loans know full well that a $50 fee for a two week payday loan for $500 is likely to be a lot cheaper than their alternatives. An example would be if someone had to write a bad check and wind up with a $35 overdraft fee, plus a hefty returned check charge, plus late fees from landlords or other lenders. The CFPB doesn’t want to mention this very real cycle of debt, as they would rather keep offering their straw man argument about astronomical fees that payday lenders almost never charge their customers.

All hope is not gone, though. Representative Blaine Luetkemeyer is fighting to bring some common sense back to the bargaining table. Luetkemeyer has been one of the few elected officials to stand up to the CFPB in recent years. He went to bat to try to stop the industry exterminating effects of the CFPB’s Operation Choke Point, and continues to be an advocate for lower income households, while others continue to turn a blind eye to the fact that the CFPB continues to overstep its boundaries; much to the detriment of the lower income segment of our country. We can only hope that other government officials will step up to the plate and offer Luetkemeyer some support in the fight to rein in the Consumer Financial Protection Bureau.

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