How does $2,500 in payday loans morph into $60,000 in interest? Ask DNC Chair Debbie Wasserman-Schultz.
Last week Elliot Clark shared a harrowing tale of $2,500 in payday loans that ballooned into a monstrous $60,000 due to insanely high interest rates.
When Clark’s wife slipped and fell on a patch of ice, breaking her ankle, he took out a $500 payday loan to cover her initial medical bill. But his wife required further treatment that cost more than $20,000.
With his wife unable to work, no insurance and bills piling up, Clark took out four more $500 payday loans.
Elliot Clark and his wife’s situation is alarmingly common in the US. Over 42.9 million Americans carry unpaid medical debt and a Jan. 2016 survey by Bankrate.Com reveals 63 percent of us are living so far out on the edge that we cannot come up with $500 to handle common emergencies like an emergency room visit or a needed car repair.
So what do people with maxed out credit cards and no friends or family they can hit up for some quick cash do? They turn to the only resource available: Payday loans. Unfortunately, these cash advances for low-income folks with dings on their credit (or no credit record at all) wind up costing dearly in interest charges.
Elliot Clark, who now volunteers at a food pantry — where 40 percent of those seeking help have fallen prey to pay day loans — explains:
“You have to pay it back in weeks. The interest on that $500 is $95, so you have to pay $595. Payday loans are something to prey upon the poor that can’t do better, that don’t have credit, that struggle to make it day-to-day. All pay loan shops are is legalized loan sharking.”
So what does all of this have to do with Debbie Wasserman-Schultz? As it turns out, the Florida rep. and DNC chair helped block new Consumer Financial Protection Bureau (CFTP) rules that would crack down on these predatory lending practices. As my American News X colleague Deborah Montesano explains:
Even though the Orlando Sentinel reported that 7% of Florida’s population has to resort to this type of credit, DWS — who represents a Florida district in Congress — recently voted to delay rules that would cut back the abuses.
While states are still free to enact tougher laws, we all know that GOP lawmakers in red states like Missouri — where Elliot Clark hails from — won’t lift a finger to help their poorest and most vulnerable citizens.
The Democratic Party is supposed to stand up for the rights of poor, working-class and middle-class Americans against those who seek to exploit and take advantage of us. But Debbie Wasserman-Schultz betrayed them, using the excuse that if we crack down, lenders will stop doing payday loans, and people like Clark will be screwed. Alas, the real reason probably has a lot more to do with the fact that DSW has taken money from payday lenders and Wall Street banks on behalf of her campaign.
On top of that, Debbie Wasserman-Schultz has quietly removed President Barack Obama’s ban on lobbyists for the DNC and put the Democratic Party back up for sale.
In a display of moral bankruptcy, she guided the effort by the DNC to eliminate restrictions on donations by lobbyists and political action committees — a ban that was put into place by presidential nominee Barack Obama in 2008.
People like DSW serve as an example of exactly what’s gone wrong with the Democratic Party and with our nation’s government as a whole. Meanwhile, Elliot Clark’s payday loan nightmare reveals our nation’s toxic clusterfuck of stagnant wages, a shredded social safety net, overpriced health care, and for-profit companies run amok.
Watch: Elliot Clark shares his payday loan nightmare with KCTV5.
Featured image: cc 2011 Gage Skidmore.