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community financial services association of america
Predatory Payday Loan Industry Showers GOP Lawmakers With Cash as CFPB Ruling Looms
"If the Supreme Court doesn't do the industry's bidding by weakening the CFPB, predatory lenders are counting on their MAGA Majority friends to finish the job," said the watchdog group behind a new analysis.
Nov 06, 2023
The payday lending industry has donated tens of thousands of dollars to congressional Republicans who backed a lawsuit asking the U.S. Supreme Court to invalidate the Consumer Financial Protection Bureau's funding structure, a step that would give corporate-friendly GOP lawmakers an opening to gut the agency they've been targeting since its creation.
A new report by the watchdog group Accountable.US—shared exclusively with Common Dreams—shows that the predatory payday loan industry gave at least $82,500 to the campaigns of Republican lawmakers who signed an amicus brief supporting the challenge to the CFPB, whose funding comes from the Federal Reserve system rather than annual congressional appropriations.
At least five Republicans—including Sen. Tim Scott (R-S.C.), the top Republican on the Senate Banking Committee—received a total of $23,400 in campaign contributions from board members of the Community Financial Services Association of America (CFSA) after they signed onto the amicus brief.
The CFSA is an industry trade group that brought the suit against the CFPB, challenging an agency rule targeting the abusive practices of payday lenders. The case has been described as an existential threat to the consumer agency and a potential disaster for the U.S. economy.
A previous analysis by Accountable.US found that CFSA member companies "have histories of criminal behavior or involvement in corruption and ethics scandals, including racketeering convictions, Ponzi scheme payouts, and payments to disgraced politicians."
Rep. Bill Posey (R-Fla.) received $7,500 in campaign donations from the owners of the payday lending company Amscot Financial, a CFSA member, less than two weeks after he backed the amicus brief, which echoes the industry's widely disputed claim that the CFPB's funding structure is unconstitutional. Amscot was charged in the late 1990s with fraud and racketeering, and the company's CEO, Ian MacKechnie, is banned for life from selling insurance in Florida.
"Predatory lenders, including convicted criminals, are greasing the palms of Republicans in Congress who endorsed their legal scheme for gutting the nation's top consumer advocate," said Liz Zelnick, director of the Economic Security and Corporate Power Program at Accountable.US. "It's all part of the plan for payday lenders notorious for trapping families in debt with triple-digit interest rates."
Accountable.US identified 27 Republican supporters of the CFPB challenge who received donations from the payday lending industry following their support for the amicus brief. Eleven of the GOP lawmakers, including Reps. Blaine Luetkemeyer (Mo.) and Bill Huizenga (Mich.), are members of the House Financial Services Committee.
Sen. Roger Wicker (R-Miss.), one of six GOP senators named in the Accountable.US report, got $6,600 in donations from Michael Lynn Hodges, the chairman of Advance Financial, after backing the amicus brief.
In 2019, consumer watchdogs obtained audio of Hodges bragging about how campaign donations bought the payday lending industry access to the Trump White House.
"Since the CFPB's inception, the financial industry and their lackeys in Congress have tried to shut it down all because it's an agency that puts consumers before corporations."
The conservative-dominated U.S. Supreme Court heard oral arguments in CFPB v. CFSA last month, and the justices "appeared highly skeptical that Congress improperly funded the Consumer Financial Protection Bureau by tethering its budget to the Federal Reserve," the American Banker reported at the time.
But the legal uncertainty generated by the case has benefited payday lenders, which profit by offering sky-high-interest loans to struggling Americans.
As The Washington Postreported late last month, payday lenders "have blocked at least five federal investigations into their business practices since the start of last year, part of a broad and aggressive campaign by payday lenders to neuter or eliminate their chief watchdog agency in Washington."
"Some companies have successfully cited the pending Supreme Court decision to slow ongoing CFPB investigations or fight off the agency's recent punishments," the Post found after reviewing court filings. "Top lending executives, meanwhile, have donated generously this year to Republican lawmakers and presidential candidates who previously signaled they could restrain, if not eliminate, the bureau."
Even if the Supreme Court rejects the CFSA's challenge and upholds the CFPB's funding structure—which insulates it from annual political fights over government spending—Republicans who have been hostile to the agency since its establishment in the wake of the 2008 financial crisis are unlikely to stop trying to gut its ability to pursue relief for consumers and impose penalties on lawbreaking corporations.
Rep. Andy Barr (R-Ky.)—who helped lead the anti-CFPB amicus brief—introduced legislation in March that would make the agency's funding subject to the yearly congressional appropriations process, setting the stage for budget cuts. The legislation is just one of the slew of bills Republicans have introduced in their campaign against the CFPB, which has delivered $19 billion in relief to consumers since its creation in 2011.
"If the Supreme Court doesn't do the industry's bidding by weakening the CFPB, predatory lenders are counting on their MAGA Majority friends to finish the job of rolling back consumer protections for millions of Americans," said Zelnick. "Since the CFPB's inception, the financial industry and their lackeys in Congress have tried to shut it down all because it's an agency that puts consumers before corporations."
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'He Cannot Be Trusted': Thomas Urged to Recuse From CFPB Case Over Koch Ties
"All justices personally close to proprietors of shady financial services firms should recuse themselves, full stop," said Revolving Door Project's Jeff Hauser.
Sep 25, 2023
U.S. Supreme Court Justice Clarence Thomas on Monday faced mounting pressure to recuse himself from a case that experts warn "poses an existential threat" to a consumer-focused federal agency in the wake of revelations that he secretly served as an in-person "fundraising draw" for Koch network donor events.
ProPublica's Friday reporting on Thomas' Koch connections came amid heightened scrutiny of the justice's ties to billionaires with business before the court. Next week, the court is scheduled to hear oral arguments in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America (CFSA)—a case challenging the agency's funding structure brought by a group that represents payday lenders.
"His repeated abuse of his office for personal gain is a national disgrace."
"Clarence Thomas' close ties to the Koch network—which has spent billions trying to make it easier for corporate predators to rip off everyday Americans and face zero accountability—are grounds for his immediate recusal from the CFPB case," Revolving Door Project (RDP) senior researcher Vishal Shankar argued Monday.
"He cannot be trusted to rule impartially on matters that would financially benefit his billionaire benefactors, and by extension himself," Shankar said of Thomas. "His repeated abuse of his office for personal gain is a national disgrace."
Critics—including Democrats in Congress and watchdog groups—have called for new Supreme Court ethics policies, a U.S. Department of Justice probe, and even Thomas' resignation over recent reporting about his relationship with billionaire Harlan Crow and other rich GOP donors who have showered the justice with luxury vacations and other gifts.
Crow's "real estate empire has bankrolled the National Multifamily Housing Council—a landlord lobbying group that has opposed CFPB regulation of the tenant screening industry," RDP highlighted Monday.
"While the artificial 'Community Financial Services Association of America' is the named litigant opposite the CFPB, all observers understand that the stakes in this litigation are shared by every investor in the types of companies that profit from unfair, deceptive, or abusive practices," said RDP executive director Jeff Hauser. "Just because Koch and others have used a shell organization to back this lawsuit doesn't mean that their ties to justices are any less relevant."
RDP also noted that attorney John Eastman—an ex-adviser to former President Donald Trump who was indicted in the Georgia election interference case and corresponded with right-wing activist Ginni Thomas, the justice's wife, before the January 6, 2021 insurrection—filed an amicus brief in CFPB v. CFSA supporting the payday lenders.
RDP's recusal demand echoed Accountable.US senior adviser Kyle Herrig's response to ProPublica's reporting last week.
"It's clear that Justice Thomas sees his position on our nation's highest court as a way to upgrade his own lifestyle with no regard for ethics or consequences," Herrig said Friday. "It was his own decadeslong improper financial relationship with Harlan Crow that sparked the Supreme Court corruption crisis in the first place—and that was just the tip of the iceberg."
"As ethics violations by Thomas and others keep piling up, Chief Justice Roberts' lack of action becomes more egregious," he added. "The chief justice must demand Justice Thomas recuse himself from upcoming cases with Koch network conflicts of interest. We need accountability and reform now."
As Common Dreams reported last Monday, Justice Samuel Alito, another member of the court's right-wing supermajority, has also faced calls to recuse himself from CFPB v. CFSA, given his private jet travel with billionaire Paul Singer, whose investment management firm holds at least $90 million in financial companies overseen by the agency.
"All justices personally close to proprietors of shady financial services firms should recuse themselves, full stop," Hauser declared Monday. "And if any justices persist in hearing this case despite being self-evidently biased, the case for rebalancing the Supreme Court to create an ethical majority will become even stronger."
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'Shameless Corporate Shill' Mick Mulvaney Tells SCOTUS to Destroy Agency Trump Let Him Lead
"It's time to stop pretending this case is anything but a brazen power grab by corporate criminals and their loyal bagmen," one researcher said of a payday lender trade association's attack on the CFPB's funding structure.
Jul 11, 2023
Critics of Mick Mulvaney are calling out the former Republican congressman and Trump administration official this week for submitting an amicus brief to the U.S. Supreme Court urging the justices to gut a federal agency he once directed.
The case Mulvaney weighed in on Monday, Community Financial Services Association of America (CFSA) v. Consumer Financial Protection Bureau (CFPB), involves the payday lender trade association challenging the agency's funding structure.
After then-President Donald Trump appointed him as acting director of the CFPB in November 2017, Mulvaney spent the next year trying to sabotage it. He was fiercely criticized, with U.S. Sen. Elizabeth Warren (D-Mass.), who played a key role in establishing the bureau, saying in 2018 that "this is what happens when you put someone in charge of an agency they think shouldn't exist."
Revolving Door Project senior researcher Vishal Shankar said in a statement Tuesday that "by authoring an amicus brief supporting his former campaign donor, Mick Mulvaney has again proven himself to be a shameless corporate shill."
"As a congressman and CFPB director, Mulvaney repeatedly tried to kill the CFPB after raking in whopping sums from big banks and predatory lenders who wanted the bureau dead," Shankar noted. "Now, with the help of his disgraced former lieutenant, Mulvaney wants SCOTUS to finish the job. It's time to stop pretending this case is anything but a brazen power grab by corporate criminals and their loyal bagmen."
"As a congressman and CFPB director, Mulvaney repeatedly tried to kill the CFPB after raking in whopping sums from big banks and predatory lenders who wanted the bureau dead."
Mulvaney's brief—which names Eric Blankenstein, a Trump appointee who resigned from the CFPB in 2019 over racist blog posts, as one of his two attorneys—claims that "how the CFPB is funded is contrary to the separation of powers that undergirds our entire system of constitutional government."
"It gives a single director control over hundreds of federal workers and hundreds of millions of dollars," the document states. "It deprives Congress of any meaningful oversight of one of the most impactful federal financial services regulators. By extension, it denies the American citizenry the opportunity to effect change, even if a majority of them want to do so."
Accountable.US spokesperson Jeremy Funk warned in response to the filing on Monday that "if the Supreme Court gives those with an ax to grind against the CFPB what they want, it will likely lead to the worst rollback of consumer protections in U.S. history."
"Financial industry stooge Mick Mulvaney and hate crime denier Eric Blankenstein may be the least credible former Trump officials to weigh in on whether the CFPB should keep protecting consumers from industry abuse and discrimination," Funk declared.
"If the idea is to make predatory lenders who filed this baseless lawsuit look good in comparison, these would be the right-wing trolls to do it," he continued. "It says it all about the merits of this case that it's being pushed by a coalition of predatory lenders, industry money chasers, an author of racist internet ravings, and a seminal architect of the insurrection."
Among the other backers of the CFSA's argument is former Trump attorney John Eastman, infamous for his contributions to the former president's "Big Lie" about the 2020 election, which led to the January 6, 2021 attack on the U.S. Capitol.
Along with also taking aim at Mulvaney—who was hired as a CBS contributor last year—experts at the Revolving Door Project have blasted Eastman's brief.
"If the CFPB weren't so popular, corrupt bankers and their proxy members of Congress would have succeeded in killing it legislatively," Jeff Hauser, the project's executive director, said Tuesday. "Since the CFPB is too popular to take on legislatively, sellout has-beens like Mulvaney and Blankenstein are shifting to Plan B, seeking action by a judiciary which is as corrupted by big money as it is blinded by right-wing zealotry."
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