At this point in the pandemic, it’s hard to deny that working Americans are facing dire circumstances. The virus ended the longest era of U.S. economic expansion, created an unemployment problem that didn’t exist in the eight years before Donald Trump took office, and economic relief has been tough to negotiate with Republicans in the Senate. While Trump couldn’t manage to get a higher stimulus payment approved for the American people, one of his more odious deregulations is providing emergency cash loans to struggling workers, along with an economic trap door that comes along with it.
Payday lenders are one of the most predatory types of lending agencies in America. Borrowers can receive a cash advance on their paychecks when they’re struggling, but the fees and rules keep those same borrowers in an endless trap of trying to pay the loan back. Against a $500 loan, borrowers must pay back the entire $500 plus a large fee when their paycheck comes, leaving them broke. The rules, however, say they can reborrow as soon as they pay off their first loan, which catches many customers, unable to be approved for a traditional loan, caught in endless cycles of borrowing and repaying.
This cycle, because of the higher rate of poverty among communities of color, hits black and Latino communities the hardest.
During Obama’s terms in office, strict regulations curbed the predatory practices of these lenders, and states enacted their own laws in kind, but Trump has of course deregulated the system, allowing for more borrowers, higher fees, and extended cycles of poverty. New York Attorney General Letitia James plans to fight back against that deregulation in her state, which she announced in a tweet:
‘I’m filing a lawsuit to stop a Trump administration rule that allows predatory lenders to bypass state laws and take advantage of our most vulnerable communities.
‘New Yorkers are already suffering and I won’t allow the federal government to inflict even greater harm.’
Twitter offered their encouragement for that fight and for the one Trump faces upon leaving office, which includes state charges of potential tax and bank fraud related to the Trump family. Read some of their comments below:
