LONDON, ENGLAND - NOVEMBER 01:  A general view of a 'Speedy Cash' cash loans shop on Brixton High Street on November 1, 2012 in London, England. The recession has changed the face of the UK's high streets, which have seen a boom in bookmakers, discount stores, charity shops, cheque cashing (payday loans) and pawnbrokers as cash-strapped Brits struggled with their finances.  (Photo by Dan Kitwood/Getty Images)

MICHAEL J. SAINATO – How the Payday Loan Industry is Obstructing Reform

In June 2016, the Consumer Financial Protection Bureau proposed new guidelines to protect consumers from payday loan traps. These traps help perpetuate the cycle of poverty and prey on individuals in low income communities who are unable to obtain loans from a bank. The multi-billion-dollar payday lending industry has garnered influence with both Republicans and Democrats in order to inoculate itself from legislations and reforms that could potentially hurt its profits.

The call from progressives to reign in this industry has put political pressure on the Democrats who have traditionally protected and pushed its interests as they benefited from big campaign donations. Disgraced DNC Chair Debbie Wasserman Schultz earned the nickname “Debt Trap Debbie” from a progressive group in Florida due to her longstanding ties to the payday loan industry before she flip-flopped on the issue in June 2016 preceding her first Democratic Primary race ever since she first entered congress in 2004.

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