Wall Street-Friendly Lawmakers Sought Bailout For Shady Lenders

May 8, 2020 Media

A bipartisan group of House Financial Services Committee members asked the Federal Reserve in an April letter to extend an emergency loan program to a host of controversial financial firms that offer high-interest loans to low-income Americans.

In other words, firms that offer Americans high-interest loans want a low-cost loan from the government.

All 14 signatories of the April letter are recipients of campaign contributions this election cycle from the political action committee of the American Financial Services Association, or AFSA, which represents subprime lenders’ interests in Washington.

“It’s bad on the substance to have the Federal Reserve be lending to subprime consumer and small business lenders,” Graham Steele, a former Democratic counsel on the Senate Banking Committee, who now runs Stanford School of Business’ Corporations and Society Initiative. “It doesn’t look good when the members asking for that kind of bailout for these companies are also funded by those predatory lenders.”

“The Fed and the Small Business Administration should do everything they can to stop private equity from getting access to taxpayer funding, as private equity funds will use that funding to lay people off and buy themselves more private jets,” said Matt Stoller, a former House Financial Services Committee staffer, who is now director of research at the American Economic Liberties Project.